2022 (9) TMI 1051 - HC - GST

Cancellation of registration of the petitioner's firm - time limitation - appeal has been dismissed as being beyond the period prescribed for filing of appeal under section 107(4) of the CGST Act - HELD THAT - Considering the fact that the appellate tribunal has not yet been created as is prescribed under the Act, this court is to consider the validity of both the orders under challenge. The submission of the counsel for the petitioner cannot be accepted, in so far as it relates to the appellate order dated 29.03.2022. However, the submission of the petitioner made against the order dated 15.03.2019, is accepted. A perusal of the Annexure no.2, makes it clear that no reasons whatsoever have been recorded while passing the order of cancellation of the registration of the petitioner's firm. The order clearly being without any reason cannot be accepted to be an order in accordance with law. It is essential that every administrative authority or a quasi judicial authority should indicate the reasons, howsoever, brief they may be before passing an order of the nature which has been done by the authority. The order passed dated 15.03.2019 has a very harsh consequences and the same being without any reason whatsoever, fails to satisfy the test of a judicial order and suffers from the vice of violation of Article 14 of the Constitution of India, as such, the order dated 15.03.2019 is set aside with direction to the petitioner to file his response to the show cause notice before the respondent no.3 who shall pass fresh order after giving an opportunity of hearing to the petitioner with all expedition. Petition allowed.

Summary

Issues: Challenge to cancellation of firm's registration under section 29 of CGST Act and dismissal of appeal under section 107(4) of the Act.

Cancellation of Firm's Registration under Section 29:
The petitioner challenged the cancellation of their firm's registration under section 29 of the CGST Act, arguing that the order lacked a show cause notice and an opportunity for a hearing. The counsel contended that the order was arbitrary, lacked reasoning, and did not reflect any application of mind. The petitioner's appeal was filed beyond the prescribed period due to medical emergencies, and the authorized representative holding the registration information had passed away. The counsel emphasized the need for the order to be subject to judicial review for non-observance of the principle of natural justice. The Standing Counsel argued that the authority had taken steps for compliance with natural justice, but the petitioner failed to respond to the show cause notice or attend the hearing.

Dismissal of Appeal under Section 107(4):
The appeal was dismissed as being beyond the limitation period, with the petitioner citing medical emergencies as the reason for the delay. The Standing Counsel contended that all efforts for compliance were made by the authority, and the appeal was filed late. The court considered the absence of the appellate tribunal as prescribed under the Act and evaluated the validity of both challenged orders. The court accepted the petitioner's argument against the cancellation order, noting the lack of reasons recorded for canceling the registration, which violated the principles of natural justice and Article 14 of the Constitution of India. The court set aside the cancellation order, directing the petitioner to respond to the show cause notice for a fresh decision with an opportunity for a hearing.

In conclusion, the court allowed the writ petition, setting aside the cancellation order and consequently the appellate order. The judgment emphasized the importance of providing reasons for administrative or quasi-judicial decisions to ensure compliance with legal principles and constitutional rights.