2024 (10) TMI 1317 - HC - GST

Cancellation of registration of the petitioner - rejection on the ground of laches in filing the appeal - no reasons assigned for cancellation - non-application of mind - violation of principles of natural justice - HELD THAT - The record shows that no reason whatsoever has been assigned for cancellation of registration of the petitioner, however, the reason is the heartbeat and soul of any judicial or administrative order. In the impugned order, no reason has been assigned which shows that same has been passed without any application of mind, which does not satisfy the test of Article 14 of Constitution of India. This Court in the case of M/s Namo Narayan Singh Vs. State of U.P. and Others 2023 (10) TMI 482 - ALLAHABAD HIGH COURT has held that providing of reasons in order is of essence in judicial proceedings. The Hon ble Apex Court in the case of Hongo India (P) Ltd. 2009 (3) TMI 31 - SUPREME COURT and the Karnataka High Court in the case of Director of Mines and Geology 2011 (9) TMI 700 - KARNATAKA HIGH COURT has held that delay i.e. beyond the period, cannot be condoned. In the case in hand, the cancellation of registration order has been passed without application of mind as no reason has been assigned in the impugned order dated 08.08.2023. However, the Division Bench of this Court has categorically held that if no reason has been given for cancelling the registration, doctrine of merger will not apply and therefore, the judgment relied upon by the counsel for the respondents in the case at hand, are of no aid to them. The matter is remanded to the adjudicating authority and the adjudicating authority after submission of reply to the show cause notice by the petitioner within four weeks from today as it is directed to the petitioner to file it, shall proceed de novo to pass a reasoned and speaking order after granting due opportunity of hearing to the petitioner - Petition allowed by way of remand.

Issues:
1. Challenge to the cancellation of registration order.
2. Grounds for appeal rejection based on delay.
3. Lack of reasons in the impugned order.
4. Application of mind in administrative orders.
5. Doctrine of merger.
6. Power to condone delay in filing appeals.
7. Compliance with Article 14 of the Constitution of India.

Detailed Analysis:
1. The petitioner challenged the order canceling their registration, citing lack of reasons and failure to apply the doctrine of merger. The absence of reasons in the cancellation order was deemed a violation of Article 14 of the Constitution of India, as per the judgment in the case of Surendra Bahadur Singh. The court emphasized that reasons are crucial in judicial and administrative orders, as highlighted in the case of Om Prakash Mishra. The judgment in M/s Namo Narayan Singh further stressed the importance of providing reasons in judicial proceedings.

2. The rejection of the petitioner's appeal based on delay beyond the prescribed period was supported by the respondent's counsel, citing precedents such as Commissioner of Customs & Central Excise Vs. Hongo India (P) Ltd. and Director of Mines and Geology Vs. C.C.E. (Appeals-II), Bangalore. The court reiterated that delay beyond the statutory period cannot be condoned, as established in various judgments, including those of the Allahabad High Court.

3. The court noted that the cancellation order lacked any reasons, which is essential for the validity of administrative actions. Relying on the judgment in the case of Ashok Kumar Vishwakarma, the court emphasized that the absence of reasons renders the order unsustainable, irrespective of the appeal outcome. The court highlighted the significance of reasons in judicial proceedings to ensure compliance with Article 14 of the Constitution of India.

4. The petitioner argued that the cancellation order was passed without proper application of mind, as no reasons were provided. The court, referring to the judgment in the case of Whirlpool Corporation, emphasized that administrative orders must demonstrate an application of mind to uphold the principles of natural justice. The court set aside the impugned orders, emphasizing the importance of reasoned and speaking orders in administrative actions.

5. The doctrine of merger was invoked by the petitioner to challenge the cancellation order, emphasizing that if an appeal is not decided on merit, the doctrine of merger does not apply. The court concurred with this argument, highlighting that the absence of reasons in the cancellation order precludes the application of the doctrine of merger, as established in previous judgments.

6. The respondent's counsel argued against condoning the delay in filing the appeal, citing various judgments that emphasized the limited power of courts to condone delays beyond the prescribed period. The court upheld this argument, emphasizing the importance of adhering to statutory timelines in filing appeals to maintain the integrity of legal processes.

7. The court ultimately allowed the writ petition, setting aside the impugned orders and remanding the matter to the adjudicating authority. The court directed the authority to consider the petitioner's reply to the show cause notice and pass a reasoned and speaking order after providing the petitioner with a due opportunity to be heard. The judgment highlighted the necessity of reasons in administrative actions to ensure compliance with legal principles.

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