2024 (10) TMI 493 - HC - GST

Order of cancellation of registration passed by the Assessing Officer upheld - appeal was dismissed on the ground of limitation - petitioner challenged the 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 - principles of natural justice - 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 issued the guidelines to the respondent-authorities that ' Our concern is that on account of procedural lapses, the High Court should not be flooded with writ applications. 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.' The aforesaid judgment was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner. 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 - the matter is remanded back to the Assessing Officer at the show cause notice stage - this petition is partly allowed and accordingly, stands disposed of 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.

Summary

Issues:
Challenge to order of cancellation of registration on grounds of lack of hearing and reason provided.
Appeal dismissal on the ground of limitation.
Non-compliance with court guidelines for issuing cancellation notices.
Remedy sought to quash and set aside the orders and remand the matter.
Directions for the Assessing Officer to provide detailed reasons and follow timelines for further proceedings.

Analysis:
The petitioner challenged the order of cancellation of registration, citing lack of opportunity for a hearing and absence of reasons for the cancellation. The Appellate Authority upheld the cancellation order, dismissing the appeal on the basis of limitation. The petitioner contended that the respondent authorities were issuing cryptic notices despite court guidelines issued in a previous case. The court emphasized the importance of adherence to procedural fairness to avoid unnecessary litigation. The judgment highlighted the need for authorities to provide detailed show cause notices and reasons for cancellation, allowing dealers an opportunity to respond effectively.

The court noted that the order of cancellation lacked reasons and the appeal under the GST Act was also dismissed. As a result, the revisional power under section 108 of the GST Act could not be exercised by the respondent authorities. The court directed the quashing of 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, with specific directions provided for the proceedings.

The court partially allowed the petition, setting aside the impugned orders and remanding the matter to the Assessing Officer. The registration of the petitioner was to remain suspended until the show cause notice stage was completed. The court clarified that it had not delved into the merits of the case and instructed the respondent authorities to pass an appropriate order in accordance with the law, ensuring detailed reasons and a fair opportunity for the petitioner to be heard. The timelines provided were to be strictly followed by both parties to expedite the resolution of the show cause notice.