2024 (9) TMI 500 - HC - GST

Cancellation of registration or petition - cancellation on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT - The Coordinate Bench of this Court in case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) 2022 (4) TMI 864 - GUJARAT HIGH COURT has issued the guidelines to the respondent-authorities - The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner. In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeal filed by the petitioner under Section 107 of the GST Act is also dismissed - As the Appellate Authority has dismissed the appeal of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. 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 - Petition partly allowed - matter remanded.

Summary

Issues:
Challenge to order of cancellation of registration based on lack of hearing opportunity and reasons provided. Failure to follow guidelines issued by the court in a previous judgment. Appeal dismissal under Section 107 of the GST Act. Remand of the matter to the Assessing Officer with specific directions.

Analysis:
The petitioner challenged the order of cancellation of registration, citing lack of hearing opportunity and absence of reasons for the cancellation. The Appellate Authority upheld the cancellation order on grounds of limitation, leading to the dismissal of the appeal under Section 107 of the GST Act. The petitioner highlighted non-compliance by respondent authorities with guidelines set in a prior judgment, emphasizing the importance of natural justice principles and procedural diligence to avoid unnecessary litigation.

The court referred to a previous judgment outlining specific guidelines for registration cancellation procedures, emphasizing the need for detailed show cause notices and physical forwarding of orders to dealers. The court stressed the importance of notifying dealers about evidence relied upon, reducing procedural lapses to prevent unwarranted writ applications. The court allowed writ applications based on natural justice violations, quashing show cause notices and cancellation orders, and directing authorities to issue fresh notices with reasons, provide a hearing opportunity, and pass speaking orders on merits.

Despite the 2022 judgment's directions, respondent authorities issued cryptic notices and cancellation orders, failing to adhere to the prescribed procedures. The current cancellation order lacked reasons, and the appeal dismissal prevented revisional power under Section 108 of the GST Act. Consequently, the impugned orders were set aside, and the matter was remanded to the Assessing Officer at the show cause notice stage, with the petitioner's registration remaining suspended until resolution.

The court directed the Assessing Officer to provide detailed reasons for cancellation within two weeks, allowing the petitioner to file a written reply within the same period. After considering the reply and providing a personal hearing, respondent authorities were instructed to pass an appropriate order within four weeks. Both parties were mandated to adhere to the timeline for efficient resolution. The court clarified that it did not delve into the case's merits, leaving the authorities to decide based on law, detailed reasons, and a fair hearing opportunity.

In conclusion, the petition was partly allowed by quashing the impugned orders and remanding the matter for proper procedure compliance. The petitioner's registration suspension was maintained until the show cause notice was resolved as per the specified directions. The court emphasized that the authorities must act in accordance with the law, ensuring a fair process for all parties involved. The petition was disposed of without costs.