2023 (10) TMI 91 - HC - GST

Cancellation of GST registration of petitioner - petitioner had not submitted Form GSTR 3B return for the period from March 2022 to August, 2022 - right of defence denied to petitioner - violation of principles of natural justice - HELD THAT - Admittedly, the petitioner has filed his returns for the month of March 2022 on 3.11.2022, which is subsequent to the show cause notice and prior to Ext.P4 cancellation order. Thus, as Ext.P2 show cause notice or Ext.P4 order do not advert to any of these aspects, the same is passed in flagrant violation of the principles of natural justice, because the petitioner has been denied his right of defence to Ext.P2 show cause notice. It is trite; that quasi-judicial authorities have to function with fairness, openness and reasonableness. Ext.P2 show cause notice and Ext.P4 order substantiates that the respondents have acted in haste and in an unreasonable manner, denying the petitioner a fair opportunity to defend himself. Hence, Exts.P2 and P4 suffer from the errors of law and are liable to be quashed by exercising the extraordinary powers of this Court under Article 226 of the Constitution of India. Exts.P2 and P4 orders are quashed - petition allowed.

Summary

Issues Involved:
The judgment involves the cancellation of GST registration due to delayed submission of Form GSTR 3B return, violation of principles of natural justice, and the need for fair opportunity for defense.

Cancellation of GST Registration:
The petitioner, a proprietor with KSGST/CGST registration, faced cancellation of registration due to a delay in submitting Form GSTR 3B return from March 2022 to August 2022. The first respondent issued a show cause notice (Ext.P2) for cancellation, but the petitioner filed the return for March 2022 on 3.11.2022. The court found the cancellation order (Ext.P4) erroneous and vitiated by errors of law, especially due to the lack of specific mention of months in the show cause notice, violating principles of natural justice.

Violation of Principles of Natural Justice:
The court noted that the show cause notice (Ext.P2) and cancellation order (Ext.P4) were passed without considering the petitioner's submission of the return for March 2022 after the notice was issued. This lack of consideration deprived the petitioner of the right of defense and a fair opportunity to respond. The authorities were found to have acted hastily and unreasonably, failing to adhere to the principles of fairness, openness, and reasonableness expected from quasi-judicial bodies.

Fair Opportunity for Defense:
In allowing the writ petition, the court quashed the orders (Exts.P2 and P4) and directed the respondents to issue a fresh show cause notice specifying the period of default in filing returns. The court emphasized the need for granting the petitioner a fair opportunity to present a defense and be heard before finalizing any proceedings, highlighting the importance of procedural fairness and adherence to natural justice principles in such matters.