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2025 (2) TMI 846 - HC - GSTCancellation of registration of the petitioner - appeal preferred by the petitioner has been dismissed by the respondent no.2 as barred by limitation as provided u/s 107(4) of the UPGST Act - applicability of doctrine of merger - HELD THAT - Admittedly from the perusal of the order dated 06.04.2021 it transpires that no reason has been assigned for cancellation of the registration of the petitioner. The order of cancellation is in the teeth of various judgments of this Court as also referred to above. The reasons are heart and soul of any judicial and administrative order. In absence of the same the order cannot be justified in the eye of law. Further since the appeal of the petitioner was dismissed on the ground of delay this Court finds that the doctrine of merger will have no application considering the facts and circumstances of the present case. In M/s Chandra Sain 2022 (9) TMI 1047 - ALLAHABAD HIGH COURT this Court has held that In the present case from the perusal of the order dated 13.02.2020 clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind the same does not satisfy the test of Article 14 of the Constitution of India as such the impugned order dated 13.02.2020 (Annexure - 2) is set aside. The order dated 06.04.2021 passed by the Assistant Commissioner respondent no.3 is hereby quashed - Petition allowed.
The issues presented and considered in the judgment are as follows:1. Whether the cancellation of the petitioner's registration without following the provisions of the UPGST Act and without assigning reasons is valid.2. Whether the dismissal of the petitioner's appeal on the grounds of delay was justified under section 107(4) of the UPGST Act.Issue-Wise Detailed Analysis:Issue 1:Relevant Legal Framework and Precedents:The petitioner challenged the cancellation of their registration under the UPGST Act. The Act requires that such decisions must be supported by reasons and comply with the principles of natural justice.Court's Interpretation and Reasoning:The Court noted that the cancellation order lacked reasons, which is essential for any judicial or administrative decision. The absence of reasons rendered the order unjustifiable in the eyes of the law. The Court emphasized that reasons are the heart and soul of any judicial or administrative order.Key Evidence and Findings:The Court found that the cancellation order was passed mechanically without application of mind and without assigning any reason, contravening established legal principles.Application of Law to Facts:The Court applied the requirement of providing reasons for administrative decisions to the cancellation of the petitioner's registration. It held that the lack of reasons invalidated the cancellation order.Treatment of Competing Arguments:The petitioner argued that the cancellation was arbitrary and violated their right to run a business under Article 19 of the Indian Constitution. The respondent contended that the cancellation was justified due to the petitioner's failure to file returns and pay taxes.Conclusions:The Court quashed the cancellation order and directed the petitioner to file a reply to the show cause notice within three weeks for a fresh decision by the Adjudicating Authority.Issue 2:Relevant Legal Framework and Precedents:The dismissal of the petitioner's appeal was based on the delay in filing, as per section 107(4) of the UPGST Act.Court's Interpretation and Reasoning:The Court found that the doctrine of merger did not apply in this case, as the appeal was dismissed on procedural grounds without considering the merits. The Court emphasized the importance of providing reasons for administrative decisions that affect individuals' rights.Key Evidence and Findings:The Court highlighted that the dismissal of the appeal without considering the reasons for the delay was against the principles of natural justice.Application of Law to Facts:The Court applied the requirement of providing reasons for administrative decisions to the dismissal of the petitioner's appeal. It held that the dismissal based solely on delay was unjust.Treatment of Competing Arguments:The petitioner argued that the dismissal of the appeal was unjustified due to the lack of consideration of the reasons for the delay. The respondent argued that the appeal was rightly rejected as per the statutory limitation.Conclusions:The Court set aside the order dismissing the petitioner's appeal and directed a fresh decision after considering the petitioner's defense.Significant Holdings:The Court emphasized the importance of providing reasons for administrative decisions affecting individuals' rights. It held that the absence of reasons rendered the decisions unjustifiable and in violation of the principles of natural justice.Core Principles Established:1. Administrative decisions must be supported by reasons and comply with the principles of natural justice.2. The absence of reasons renders administrative decisions unjustifiable in the eyes of the law.3. The doctrine of merger does not apply when decisions are based solely on procedural grounds without considering the merits.Final Determinations on Each Issue:1. The cancellation of the petitioner's registration without reasons was quashed, and a fresh decision was directed.2. The dismissal of the petitioner's appeal based solely on delay was set aside, and a fresh decision was directed after considering the petitioner's defense.
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