2024 (9) TMI 1580 - HC - GST

Cancellation of registration of petitioner - bar of time limitation - order has been passed without any application of mind - violation of principles of natural justice - HELD THAT - In Surendra Bahadur Singh's case 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT the appeal was barred by time under Section 107 of the Act, however, the coordinate Bench took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The order impugned herein is liable to be set aside. Accordingly, the order dated February 16, 2023 is quashed and set aside. The petitioner is directed to file its reply to the show cause notice within three weeks from date and the adjudicating authority is directed to proceed de novo and pass order after granting opportunity of hearing to the petitioner - Petition allowed.

Summary

Issues:
Challenge to order for cancellation of registration under Article 226 of the Constitution of India without application of mind; Lack of reasons in the order leading to adverse effect on the right to run business; Compliance with Article 14 of the Constitution of India; Doctrine of merger in appeal not applicable; Necessity of indicating reasons in administrative or quasi-judicial orders.

Analysis:
The judgment by the High Court of Allahabad, delivered by Hon'ble Shekhar B. Saraf and Hon'ble Manjive Shukla JJ., pertains to a writ petition challenging the cancellation of registration order dated February 16, 2023, passed by the Assistant Commissioner, Sector-3, State Tax, Etawah. The petitioner contended that the cancellation order was devoid of any application of mind, as evidenced by conflicting statements in the order regarding the submission of a reply. Citing a Division Bench judgment in a similar case, the petitioner argued that the cancellation order lacked reasoning, which is essential for quasi-judicial decisions affecting business rights under Article 19 of the Constitution of India and compliance with Article 14. The petitioner also relied on a previous judgment emphasizing the importance of providing reasons in administrative or quasi-judicial orders.

In the Division Bench judgment referred to by the petitioner, it was highlighted that even if an appeal is time-barred, the original order must be reasoned, and the petitioner should be allowed to respond to the show-cause notice. Based on this precedent, the High Court concluded that the impugned cancellation order lacked justification and set it aside. The petitioner was directed to file a reply to the show-cause notice within three weeks, and the adjudicating authority was instructed to conduct a fresh hearing and issue a new order after considering the petitioner's defense.

The High Court's decision was grounded in the principles of fairness and due process, emphasizing the significance of providing reasons in administrative or quasi-judicial actions to safeguard the rights of individuals and ensure compliance with constitutional provisions. By quashing the cancellation order and ordering a fresh adjudication with proper opportunity for the petitioner to present their case, the court upheld the rule of law and the right to a fair administrative process.

Overall, the judgment underscores the importance of procedural fairness and the requirement for administrative and quasi-judicial authorities to provide reasoned decisions that adhere to constitutional principles, thereby protecting the fundamental rights of individuals and ensuring the integrity of the legal system.