2024 (9) TMI 1639 - HC - GST

Cancellation of registration of petitioner - appeal was dismissed on the ground of limitation - challenge to order of cancellation of registration on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - HELD THAT - The Coordinate Bench of this Court in case of M/s. Aggrawal Dyeing Printing vs. State of Gujarat 2022 (4) TMI 864 - GUJARAT HIGH COURT has held that ' The procedural aspects should be looked into by the authority concerned very scrupulously and deligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department.' In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeals filed by the petitioners under Section 107 of the GST Act are also dismissed. As the Appellate Authority has dismissed the appeals 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 - the matter is remanded back to the Assessing Officer at the show cause notice stage. 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 - petition disposed off by way of remand.

Summary

Issues: Challenge to order of cancellation of registration on grounds of procedural lapses and violation of principles of natural justice.

Analysis:
The petitioner challenged the order of cancellation of registration on the grounds of not being provided with an opportunity of hearing and the order being passed without assigning any reason for cancellation. The petitioner contended that the Appellate Authority upheld the cancellation order and dismissed the appeal on the ground of limitation. The Court referred to a previous judgment where guidelines were issued to the respondent-authorities regarding the procedure to be followed in such cases. The Court emphasized the importance of providing detailed show cause notices and reasons for cancellation to avoid unnecessary litigation. The Court allowed all writ applications on the ground of violation of principles of natural justice, quashing the show cause notices and cancellation orders, and directing the authorities to issue fresh notices with reasons and provide a reasonable opportunity of hearing to the petitioners.

In the present case, the respondent authorities failed to follow the directions given in the previous judgment and issued cryptic notices and orders for cancellation of registration to the petitioner. The order of cancellation was passed without giving any reasons, and the appeals filed by the petitioners were dismissed under Section 107 of the GST Act. As a result, the respondent authorities were precluded from exercising revisional power under section 108 of the GST Act. The Court quashed and set aside the impugned orders and remanded the matter back to the Assessing Officer at the show cause notice stage. The registration of the petitioner was to remain suspended until the show cause notice was decided by the Assessing Officer.

The Court provided specific directions to be followed in the remanded matter, including the Assessing Officer providing detailed reasons for cancellation of registration within two weeks, the petitioner filing a written reply within two weeks of receiving the reasons, and the respondent authorities passing an appropriate order after personal hearing within four weeks of the reply. Both parties were required to adhere to the timeline for disposal of the show cause notice. The Court clarified that it had not delved into the merits of the case and instructed the respondent authorities to pass an order in accordance with the law after providing detailed reasons and an opportunity of hearing to the petitioner.

Ultimately, the petition was partly allowed by quashing and setting aside the impugned orders, and the matter was remanded to the Assessing Officer at the show cause notice stage. The registration of the petitioner was to remain suspended until the show cause notice was disposed of as per the specified directions. The Court disposed of the petition, discharged the notice, and made no order as to costs.