GST Registration cancellation order set aside due to lack of reasoning

[CA Bimal Jain]

The Hon’ble Patna High Court in the matter of MANOJ KUMAR SAH VERSUS THE STATE OF BIHAR, THE JOINT COMMISSIONER OF STATE TAX, MADHUBANI, BIHAR - 2023 (1) TMI 791 - PATNA HIGH COURT set aside the order of cancellation of the Goods and Service Tax (“GST”) Registration of the assessee and held that the cancellation of the GST Registration through a non-speaking order without mentioning the grounds for such cancellation is cryptic in nature and violates the principles of natural justice.

Facts:

Mr Manoj Kumar Sah (“the Petitioner”) filed the writ petition against the order of cancellation of the GST Registration. The Petitioner contended that his GST registration was cancelled without considering his reply to the Show Cause Notice (“SCN”) and without granting him the opportunity of personal hearing. Further, no reason for cancellation of the GST Registration was provided in the order.

Issue:

Whether the GST Registration can be cancelled without mentioning any reasons?

Held:

The Hon’ble Patna High Court held as under:

• The Joint Commissioner of State Tax (“the Respondent”) did not refer to the Petitioner’s reply to the SCN while passing the order as a result of which the Petitioner would become liable to both civil and penal consequences.
• The order being a non-speaking order was cryptic in nature. Further, the reason for cancellation was not decipherable from the order. Thus, the order violates the principles of natural justice.

Therefore, the Hon’ble Patna High Court set aside the order of cancellation of the GST Registration and directed the Respondent to restore the GST Registration of the Petitioner.

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