2024 (9) TMI 1537 - HC - GST

Cancellation of registration of petitioner - appeal was dismissed on the ground of limitation - opportunity of hearing as not provided - order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT - In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed. As the Appellate Authority has dismissed the appeal of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage. However, the registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer as per the directions imposed. This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage, however, the registration number of the petitioner shall remain suspended till such show cause notice is disposed of as per the directions given above.

Summary

Issues:
Challenge to order of cancellation of registration on grounds of lack of hearing and reasons, Appeal dismissal based on limitation, Compliance with guidelines from previous judgment, Suspension of registration pending show cause notice.

Analysis:
The petitioner challenged the order of cancellation of registration, contending that it was done without providing an opportunity of hearing or reasons for cancellation. The Appellate Authority upheld the cancellation order based on limitation grounds. The petitioner referred to a previous judgment by a Coordinate Bench that outlined guidelines for authorities in such cases. The guidelines emphasized the importance of providing detailed information in show cause notices and orders, avoiding surprises for the dealer, and reducing unnecessary litigation. The Court, in the previous judgment, allowed writ applications due to violation of natural justice principles and directed authorities to issue fresh notices with detailed reasons, provide a hearing, and pass speaking orders. The petitioner argued that despite this direction, the authorities issued cryptic notices and orders for cancellation.

In the present case, the registration cancellation order lacked reasons, and the appeal under Section 107 of the GST Act was dismissed. As a result, the respondent authorities could not exercise revisional power under Section 108 of the GST Act. The Court decided to quash the Appellate Authority's order and the cancellation order, remanding the matter back to the Assessing Officer at the show cause notice stage. The petitioner's registration would remain suspended until the show cause notice was decided. The Court issued specific directions for the process to be followed: providing detailed reasons for cancellation, allowing the petitioner to file a reply, conducting a personal hearing, and passing an order within a specified timeline. Both parties were required to cooperate in adhering to the timeline for the show cause notice's disposal. The Court clarified that it did not delve into the case's merits and instructed the respondent authorities to pass an appropriate order following the law.

Consequently, the petition was partly allowed by quashing the impugned orders and remanding the matter for further proceedings. The registration suspension would continue until the show cause notice was resolved as per the specified directions. The Court emphasized that the respondent authorities must provide detailed reasons and a hearing to the petitioner when passing the order. The petition was disposed of without any cost implications.