2024 (4) TMI 892 - HC - GST

Validity Of Order for Cancellation of Registration passed in Form GST REG-19 - non-application of mind - No opportunity of hearing - managing partner of petitioner s firm i.e., the deponent, was not able to concentrate on the business operations as he was attacked with paralytic stroke - Violation of Principles of natural justice - HELD THAT - Admittedly, the petitioner did not file reply to the show cause notice we find force in the submission of the learned counsel for the petitioner that the order suffers from non-application of mind and has been passed mechanically. On the said point there is no contrary instructions to the learned Government Pleader. Any counter affidavit denying the averments in para-4, of the writ affidavit, has not been filed inspite of opportunity granted. The petitioner has also annexed documents (P3) in support of para 4 of the writ affidavit. We have no reason to disbelieve the same. Consequently, we are of the view that the cause shown for not being able to file the reply to show cause notice is sufficient. The petitioner deserves opportunity of hearing to be granted in consonance with the principles of natural justice. Thus, we allow the writ petition and quash the impugned order dated 16.06.2023. Writ Petition stands allowed partly.

Summary

Issues involved:
The writ petition filed under Article 226 of the Constitution of India challenges the order of cancellation of the petitioner's GST registration, citing reasons such as non-submission of returns and violation of principles of natural justice.

Details of Judgment:

Issue 1: Cancellation of GST registration
The petitioner sought relief from the High Court to set aside the order of cancellation of registration, arguing that the order was arbitrary, illegal, against natural justice principles, and contrary to relevant Acts and judicial pronouncements. The petitioner had not replied to a show cause notice due to unforeseen circumstances, including the absence of the person handling GST matters and the managing partner's health issues. The court noted discrepancies in the order mentioning the submission of a reply that was not available, indicating a lack of application of mind. The petitioner had paid a substantial amount towards liabilities and was willing to file returns to reactivate the registration. The court found merit in the petitioner's argument that the order was passed mechanically and lacked proper consideration, thereby allowing the writ petition and directing the petitioner to submit a reply within three weeks for a fresh decision by the competent authority.

Decision:
The High Court allowed the writ petition partly, quashing the impugned order of registration cancellation and instructing the petitioner to submit a reply within three weeks for a fresh decision. No costs were awarded, and any related pending petitions were to be closed accordingly.