2024 (11) TMI 258 - HC - GST

Cancellation of registration of petitioner - opportunity of hearing not provided - 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 AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) 2022 (4) TMI 864 - GUJARAT HIGH COURT has held that 'The Appellate authority ought to have appreciated that the writ applicants at relevant point of time i.e. in year 2017, applied for registration which request was favourably considered by the authorities under the Act with a specific registration number allotted to the writ applicant. It was a transitional phase, whereby the old CST Act was repealed and the new regime of CGST/ GGST has come into force.' The aforesaid judgement 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. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage. Petition allowed by way of remand.

Summary

Issues:
Challenge to order of cancellation of registration on grounds of lack of opportunity of hearing and absence of reasons, violation of principles of natural justice, appeal dismissal on limitation ground, failure to follow court guidelines, suspension of registration pending show cause notice decision.

Analysis:
The petitioner challenged the order of cancellation of registration, contending that no opportunity of hearing was provided, and the order lacked reasons for cancellation. The Appellate Authority upheld the cancellation order citing limitation. The court referred to a previous case where guidelines were issued to authorities for issuing show cause notices and final orders. Despite the guidelines, the respondent authorities continued to issue cryptic notices and orders for cancellation. The current cancellation order lacked reasons, and the appeal under GST Act was dismissed, precluding revisional power under section 108. Consequently, the court quashed the orders and remanded the matter to the Assessing Officer at the show cause notice stage, suspending the petitioner's registration in the interim.

The court directed the Assessing Officer to provide detailed reasons for cancellation within two weeks and to provide a copy upon request. The petitioner was required to file a written reply within two weeks of receiving the reasons. Subsequently, the respondent authorities were to pass an appropriate order after a personal hearing and considering the reply within four weeks of the hearing. Both parties were instructed to adhere to the timeline for efficient disposal of the show cause notice. The court emphasized 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, ensuring detailed reasons and a fair hearing for the petitioner.

Consequently, the petition was partly allowed by quashing the impugned orders and remanding the matter for further proceedings. The registration of the petitioner would remain suspended until the show cause notice was resolved as per the specified directions. The court concluded by stating that it had not examined the merits of the case and discharged the notice without imposing any costs.