2022 (3) TMI 263 - HC - GST

Seeking restoration of the appellant s certificate of registration - cancellation of certificate of registration of the appellant for the reason that they have not filed their returns for a continuous period of six months - HELD THAT - The cancellation of the registration dated 08.02.2021 passed by the central authorities is in violation of principles of natural justice and liable to be set aside. So far as the show cause notice issued by the state authorities dated 06.06.2018 the appellant having filed the returns paid taxes as well as the late fee and interest according to their computation filed an application for revocation of the order for canceling appellant s registration. The state authorities issued show cause notice dated 11.09.2021 calling upon the appellant to explain as to why the application for revocation should not be rejected on the ground that the appellant has not paid late fee for late filing of the returns for the period from 2017-2018, 2018-2019, 2019-2020, 2020-2021 and interest liability for late filing of the returns and called upon the appellant to file their reply within seven days - the order dated 06.10.2021 does not state as to why the reply given by the appellant to the show cause notice cannot be considered. The order dated 06.10.2021 is devoid of reasons and, therefore, has to be held to be unreasonable, arbitrary and liable to be set aside. The order of cancellation of the registration made by the state authorities as well as central authorities are unsustainable and the order rejecting the application for revocation dated 06.10.2021 is also not tenable - petition allowed - decided in favor of petitioner.

Issues:
1. Challenge to order directing respondents to file affidavit-in-opposition and denial of interim relief for restoration of registration certificate under West Bengal Goods & Service Tax Act and Central Goods & Service Tax Act.
2. Cancellation of registration certificate by state and central authorities.
3. Rejection of application for revocation of cancellation.
4. Lack of reasons provided in orders leading to challenges of being unreasonable and arbitrary.
5. Jurisdictional issues regarding authorities passing orders.

Issue 1: Challenge to Order and Interim Relief
The appellant filed an intra court mandamus appeal against an order directing respondents to file affidavit-in-opposition and denying interim relief for restoring the registration certificate under the West Bengal Goods & Service Tax Act and Central Goods & Service Tax Act. The appeal was disposed of with consent of counsels.

Issue 2: Cancellation of Registration Certificate
The state authorities issued a show cause notice proposing cancellation of the appellant's registration certificate for not filing returns for six months. The appellant filed returns and paid taxes, late fees, and interest. However, the central authorities cancelled the registration without reference to a subsequent show cause notice, indicating a violation of natural justice principles.

Issue 3: Rejection of Application for Revocation
The appellant applied for revocation of the cancellation, but the state authorities rejected it citing non-payment of late fees and interest without providing reasons for disregarding the appellant's reply. This rejection was deemed unreasonable, arbitrary, and liable to be set aside.

Issue 4: Lack of Reasons in Orders
The orders of cancellation by state and central authorities, as well as the rejection of the application for revocation, were found to lack reasons, rendering them unsustainable. The absence of clear reasons in the orders led to challenges of being unreasonable and arbitrary.

Issue 5: Jurisdictional Concerns
There were discrepancies regarding whether the orders were passed by state or central authorities, leading to confusion. The lack of clarity in jurisdiction and the arbitrary exercise of authority by either entity were highlighted as violations of natural justice principles.

In conclusion, the High Court of Calcutta allowed the appeal and directed the restoration of the appellant's registration certificate under both Acts within a week. The authorities were granted liberty to issue a show cause notice if there are discrepancies in late fee remittances, with a requirement to provide a speaking order in accordance with the law. The court emphasized the importance of providing reasons in orders, ensuring compliance with natural justice principles, and avoiding arbitrary exercises of authority by state or central authorities.

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