2023 (10) TMI 582 - HC - GST

Cancellation of GST registration of petitioner - cancellation without assigning any reason - violation of principles of natural justice - HELD THAT - Admittedly, the order of cancellation has been passed without assigning any reason and revocation application has also been rejected without assigning any cogent reason and thereafter appeal has also been dismissed by the impugned order. The GST registration can only be cancelled as per Section 29 of UP GST Act. From the perusal of the impugned order, it transpires that the same has been passed without recording any cogent reason for cancelling the GST registration of the petitioner and appellate authority has also dismissed the appeal filed by the petitioner summarily without assigning any reason. The record reveals that petitioner has neither submitted reply in pursuance of notice nor appeared before the respondent authority in spite of various dates fixed before the first appellate authority, therefore, some cost is liable to be imposed upon the petitioner. Petition allowed.

Summary

Issues involved:
The issues involved in the judgment include the cancellation of GST registration without proper reasons, rejection of revocation application, dismissal of appeal without assigning reasons, and the requirement of providing reasons in judicial proceedings.

Cancellation of GST Registration:
The petitioner, a proprietorship firm engaged in retail wholesale business, had its GST registration cancelled ex parte without proper reasons. The cancellation was done following a survey and a notice under Section 29(2) of UPGST Act. The petitioner's revocation application was also rejected without a cogent reason. The Court noted that the cancellation lacked reasons, which is essential for transparency and fairness in decision-making. Failure to provide reasons violates principles of natural justice and denies justice to the litigant.

Dismissal of Appeal without Reasons:
The appellate authority summarily dismissed the petitioner's appeal without assigning any reason. The Court emphasized the importance of providing reasons in judicial proceedings, as it allows litigants to understand the basis for the acceptance or rejection of their requests. The absence of reasons renders the order lifeless and violates the principles of natural justice. The Court highlighted that reasons are crucial for the administration of justice and ensure a fair decision-making process.

Requirement of Providing Reasons in Judicial Proceedings:
The judgment emphasized the significance of providing reasons in judicial orders. It stated that every litigant approaching the Court is entitled to know the reasons for the acceptance or rejection of their requests. The Court highlighted that the reasoning behind a decision is essential for making the remedy of appeal meaningful. It is mandatory for Courts and authorities to pass orders while recording reasons, even if brief. The absence of reasoning may indicate a whimsical exercise of judicial discretion.

Decision and Directions:
The Court set aside the impugned orders and remitted the matter back to the first appellate authority. The petitioner was directed to deposit a cost of Rs. 20,000 within two weeks before the first appellate authority. The first appellate authority was instructed to pass a fresh reasoned and speaking order expeditiously, preferably within two months from the date of the production of the order's certified copy, after affording reasonable opportunities of hearing to the parties concerned.