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TMI Blog2022 (3) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... word bogus has not been used by the statute. The only contingency to which such expression may relate may be one appearing under Clauses (c) and (d) of Section 29(2) of the Act being where a registered firm does not commence its business within six months of its registration. Other than that, the term bogus may also refer to a satisfaction contemplated by Section 29(2)(c) of the Act where registration may be cancelled if the registered firm has not furnished its return for continuous period of six months. Those conditions have not been shown to exist in this case - Registration having been granted earlier, the obligation existed on the authority to specify the exact reason/charge on which it proposed to cancel the registration. In the present case, unless the respondent authority had first specified the reason why it proposed to cancel the registration and unless the authority had specified the reason why it was attempting to treat the assessee firm bogus i.e. whether reference was being made to Section 29(2)(c) or Section 29(2)(d) of the Act, by specifically stating the facts as may give rise to that charge and unless the supporting material giving rise to that charge had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the revenue department on 22.07.2020 issued under Section 29 of the Act whereby the registration granted to the assessee under the Act was proposed to be cancelled for the following solitary reason : Your firm was found bogus in inspection of SIB. Information received from headquarter. 5. The assessee was required to furnish its reply within seven working days and to appear before that authority on 24.07.2020 at 11:00 a.m. Undeniably, the assessee did not make compliance of the aforesaid notice. However, no order was passed on 24.07.2020. Also, no further notice was issued to the assessee in that proceeding. On 13.08.2020, the respondent authority cancelled the assessee's registration without disclosing any further reason. The relevant extract of the order reads as below : Order for Cancellation of Registration This has reference to your reply dated 31/07/2020 in response to the notice to show cause dated 22/07/2020; Whereas no reply to notice to show cause has been submitted; Whereas the undersigned has examined your reply and submissions made at the time of hearing and is of the opinion that your registration is liable to be cancelled for fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee before the order dated 13.08.2020 came to be passed. In any case, upon application for revocation of cancellation filed, the respondent authority was obligated to fix a date and time to hear the assessee. Mention of such a direction is also contained in the notice dated 21.08.2020. However, as has been noted above, no date or time was fixed for personal appearance of the assessee. 9. As to the second violation of principle of natural justice, it has been submitted, the original show cause notice dated 22.07.2020; the order dated 13.08.2020; notice dated 21.08.2020 and; the further order dated 20.08.2020 are, non-speaking. Neither at the stage of show cause notice, any reason permitted by the statute was mentioned or specified in that notice nor the assessee was confronted with any adverse material to reach the conclusion drawn by the respondent authority to cancel the assessee s registration. A mechanical exercise has been offered by the respondent authority and the registration of the assessee cancelled by merely describing it as bogus . 10. Elaborating his submission, it has been further submitted, the cancellation of registration can arise only in the event of exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct reads as below : Section 29. Cancellation of suspension of registration (1) (2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,- (a) a registered person has contravened such provisions of the Act or the rules made there under as may be prescribed; or (b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or (c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or (d) any person who has taken voluntary registration under subsection (3) of section 25 has not commenced business within six months from the date of registration; or (e) registration has been obtained by means of fraud, willful misstatement or suppression of facts: Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard. [PROVIDED FURTHER, that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or option to specify and/or improve the charge later. 17. In the present case, by merely describing the assessee firm bogus , the respondent authority did not make known to the assessee the exact charge that was being levelled against the assessee. Correspondingly, the respondent authority deprived the assessee of the necessary opportunity to rebut the charge. 18. In view of the discussion made above, the charge levelled in the notice dated 22.07.2020 and as was reiterated in the order dated 13.08.2020 and the further notice dated 21.08.2020 are wholly, vague. Effectively, it prevented the assessee to rebut the same. The statute contemplates issuance of the notice in specified circumstances for specific grounds. Those could not be diluted or muddled or made vague by describing the assessee firm as bogus . In absence of any specific charge, the respondent authority could not be permitted to proceed to cancel the assessee s registration. Though it may remain open to the Assessing Authority to issue a fresh notice with exact charge specification, the proceedings arising from the impugned notice is inherently defective. 19. Moreover, it is also unacceptable that the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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