2024 (7) TMI 1022 - HC - GST

Cancellation of registration of petitioner - returns could not be filed from January, 2018 onwards as petitioner has not hired any consultant - no reasons assigned for cancellation - violation of principles of natural justice - HELD THAT - It appears that the order impugned cancelling the registration of the petitioner dated 11.3.2020 is itself passed without assigning any reasons whatsoever in nature. The said order cannot be said to be as per well settled law with regard to the reasons. As the Appellate Authority has dismissed the appeals of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage. The Assessing Officer shall provide detailed reason for cancellation of registration of the petitioner, if not supplied earlier within a period of two weeks from today i.e. on or before 18.03.2024 - petition alowed by way of remand.

Summary

Issues:
Challenge to cancellation of registration under Central Goods and Service Tax Act, 2017.

Analysis:
1. Cancellation of Registration: The petitioner, a tour operator, challenged the cancellation of registration by the Commissioner (Appeals) and Superintendent under Section 29(2) of the Central Goods and Service Tax Act, 2017. The petitioner's registration was cancelled due to non-filing of returns for six months, leading to a total tax liability of Rs. 13,13,725. The petitioner cited financial difficulties during the pandemic as the reason for non-compliance but later paid all outstanding dues amounting to Rs. 26,95,432. The Appellate Authority rejected the appeal on grounds of limitation.

2. Petitioner's Arguments: The petitioner contended that the cancellation order lacked reasons and should be quashed. They argued that past returns were filed, taxes paid, and staying out of the tax regime served no purpose. Citing a previous court decision, the petitioner emphasized the need for detailed show cause notices and reasoned orders, which were lacking in this case.

3. Respondent's Arguments: The respondents defended the cancellation, stating that the show cause notice was duly served, but the petitioner failed to respond promptly. They highlighted the delay in filing the appeal as a reason for justifying the cancellation. The respondents urged the court not to entertain the petition.

4. Court's Decision: The High Court found the cancellation order lacking in reasons, following a precedent emphasizing the importance of detailed notices and evidence disclosure to avoid unnecessary litigation. The Court remanded the matter back to the Assessing Officer at the show cause notice stage, suspending the petitioner's registration until a decision is made. The Assessing Officer was directed to provide detailed reasons, allow the petitioner to respond, and pass an order within specified timelines.

5. Outcome: The petition was partially allowed, quashing the Appellate Authority's order and remanding the case for further proceedings. The Court clarified that it did not delve into the merits of the case, leaving the final decision to the respondent authorities. The parties were instructed to adhere to the proposed timeline for resolving the show cause notice, with liberty to revive the petition if needed.