2022 (12) TMI 709 - HC - GST

Revocation of cancellation of GST registration - validity of assessment order - ex-parte order - nonspeaking and cryptic order - Attachment of bank account - HELD THAT - It cannot be disputed that with the passing of the said order, petitioner is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only the order is nonspeaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences. Impact of Covid-19 Pandemic - In the peculiar facts and circumstances, the authority ought to have condoned the delay which unfortunately was not done, despite the petitioner having made a fervent request for condonation of delay in accepting the return, preventing cancellation of registration. Registration restored. Matter restored back for finalizing the petitioner s assessment and/or pass appropriate orders.

Summary

Issues:
Petitioner sought relief for quashing of orders related to cancellation of registration and freezing of bank account, restoration of registration, and restraining coercive actions.

Analysis:
The petitioner prayed for the quashing of an order issued by the Additional Commissioner, State Tax (Appeals), Patna, rejecting the application for revocation of the cancellation order of registration. Another relief sought was the quashing of an ex-parte order passed by the Joint Commissioner of State Tax, Danapur Circle, Patna, canceling the petitioner's GST registration without proper opportunity for a reply or hearing. Additionally, a direction was requested to restore the registration and de-freeze the bank account. The petitioner also sought a direction to refrain from coercive actions during the pendency of the writ petition and any other relief deemed fit in the circumstances.

The Joint Commissioner of State Taxes, Danapur Circle, Patna, canceled the petitioner's registration under Section 29 of the Bihar Goods and Services Tax Act, 2017, without issuing a show-cause notice or providing an opportunity to respond. The order lacked reasoning and violated principles of natural justice, leading to civil and penal consequences for the petitioner. The authority failed to consider the contents of the show cause and the response, rendering the cancellation order non-speaking and cryptic. The lack of reference to the show cause and response violated natural justice principles, necessitating the quashing of the order.

Despite the petitioner's request for condonation of delay due to the Covid-19 pandemic affecting the return filing, the authority did not grant the request, leading to the cancellation of registration. The petitioner's registration had been initially approved, and in light of the circumstances, the delay should have been condoned. Consequently, the order dated 20.01.2022 by the Joint Commissioner was quashed, restoring the petitioner's registration. The Commissioner of State Taxes, Government of Bihar, Patna, was directed to finalize the assessment or issue appropriate orders as per the law.

The judgment allowed the writ petition in the above terms, with any interlocutory application being disposed of accordingly. The issue of delay in filing returns was closed and not to be raised again, as confirmed by the learned Standing Counsel-11 representing the respondents.