Hazarika Brothers vs. The Union Of INDIA And 3 Ors

Held

The Court held that the Order of Rejection of Application for Revocation of Cancellation dated May 7, 2026, was not sustainable in law. The Court found that while the Show Cause Notice dated April 20, 2026, mentioned the possibility of an ex-parte decision if the petitioner failed to appear for a personal hearing, it crucially failed to specify the date and time for such a hearing. This omission meant that the petitioner was not afforded a proper and effective opportunity of being heard, which is a mandatory requirement under the first proviso to Section 30(2) of the CGST Act, 2017, and a cornerstone of natural justice. The Court also noted that the impugned order was cryptic and non-speaking. Consequently, the Court set aside and quashed the order dated May 7, 2026. The Proper Officer was directed to proceed from the stage of the Show Cause Notice dated April 20, 2026, by issuing a fresh notice for personal hearing, intimating the specific date and time, through the common portal and email. The Proper Officer is to pass a fresh order under Section 30 of the CGST Act after hearing the petitioner.

Facts

The petitioner, Hazarika Brothers, a partnership firm registered under the CGST Act, 2017, had its GST registration suspended on February 4, 2026, due to non-furnishing of returns for a continuous period of six months or two quarters. A Show Cause Notice (SCN) was issued on the same date, requiring the petitioner to file returns or submit a reply within thirty days. The petitioner failed to reply. Consequently, the Proper Officer passed an Order of Cancellation of Registration on March 16, 2026. The petitioner then filed an application for revocation of cancellation on April 6, 2026. A subsequent SCN was issued on April 20, 2026, for non-payment of government dues, including late fees and interest, with a seven-day reply period and a mention of a personal hearing. The petitioner did not reply but filed returns in April and June 2026. However, on May 7, 2026, the Proper Officer rejected the revocation application.

Key Issues

1. Whether the Order of Rejection of Application for Revocation of Cancellation dated May 7, 2026, is sustainable in law, considering the provisions of Section 30(2) of the CGST Act, 2017, and the principles of natural justice? The petitioner argued that the impugned order rejecting the revocation application was unsustainable because it was passed without affording a proper and effective opportunity of being heard, violating the principles of natural justice. Specifically, the petitioner contended that the Show Cause Notice dated April 20, 2026, mentioned a personal hearing but did not specify the date and time, thus preventing the petitioner from attending. The petitioner also argued that the order was cryptic and non-speaking. The respondents, represented by the Deputy Solicitor General of India and GST counsel, argued that the petitioner failed to reply to the Show Cause Notice dated April 20, 2026, within the stipulated time and also failed to appear for the personal hearing, leading to an ex-parte decision. They contended that the petitioner's subsequent filing of returns did not cure the defect of non-compliance with the SCN.