Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P.
FRIDAY, THE 5TH DAY OF AUGUST 2022 / 14TH SRAVANA, 1944 WP(C) NO. 25271 OF 2022 PETITIONER:
M/S. SR TRADERS, 222/1, KULAPPULLY ROAD, KAYILIAD, PALAKKAD - 679122, REPRESENTED BY ITS MANAGING PARTNER, SAFEEK.K, AGED 34 YEARS.
BY ADVS.
HARISANKAR V. MENON R.SREEJITH K.KRISHNA MEERA V.MENON RESPONDENTS:
1 STATE TAX TAX OFFICER SQUAD NO. VI,STATE GOODS AND SERVICES TAX DEPARTMENT, PALAKKAD – 678 001.
2 DEPUTY COMMISSIONER (SPECIAL CIRCLE), STATE GOODS AND SERVICES TAX DEPARTMENT, PALAKKAD – 678 001.
3 THE COMMISSIONER OF STATE GST, STATE GOODS & SERVICES TAX DEPARTMENT, TAX TOWERS, KILLIPPALAM, KARAMANA, THIRUVANATHAPURAM – 695 002.
4 CENTRAL BOARTD OF INDIRECT TAXES & CUSTOMS, GST POLICY WING, NORTH BLOCK, NEW DELHI – 110 001, REPRESENTED BY PRINCIPAL COMMISSIONER (GST).
5 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, TAXES DEPT., GOVT. SECRETARIAT, THIRUVANANTHAPURAM – 695 001.
ADV. THUSHARA JAMES (SR GP), ADV. SREELAL .N. WARRIER, (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 25271 OF 2022 2 JUDGMENT The petitioner has approached this Court being aggrieved by Ext.P5 order for cancellation of the registration obtained by the petitioner under the GST laws.
2.
The learned counsel for the petitioner states that certain notices were issued to the petitioner on the allegation that the petitioner had wrongly availed input tax credit on the basis of fake invoices issued by certain dealers in Tamil Nadu.
It was alleged that the invoices were not in respect of any supplies actually made to the petitioner. Pending the adjudication of that issue, the petitioner was issued with Ext.P3 notice calling upon the petitioner to show cause as to why the registration under the GST laws should not be cancelled on the allegation that the petitioner had issued invoice / bill without suppling goods and services and/or in violation of the provisions of the Act, or the rules made thereunder, leading to wrongful availment or utlization of input tax credit or refund of tax. The petitioner submitted Ext.P4 reply pointing out that even though there were allegations against the petitioner that the petitioner had wrongly availed input tax credit in respect of supplies not
WP(C) NO. 25271 OF 2022 3 actually effected by dealers in Tamil Nadu and on the basis of fake invoices, there was absolutely no allegation that the petitioner had issued any such fake invoices to its customers.
It was pointed out that the circumstances mentioned in Section 29(2)(a) to (e) were not attracted and the proposal to cancel the registration ought to be dropped. On receipt of Ext.P4, the Officer has issued Ext.P5 order where the reason stated for cancellation is the following:
“The reply filed by the tax payer was not satisfactory”.
3.
The learned Senior Government Pleader appearing for the respondents would contend that there were sufficient circumstances warranting the cancellation of registration of the petitioner. However, she fairly submits that Ext.P5 order does not reflect the reasoning and therefore, the matter has to be remitted back for consideration of the Officer.
4.
Having heard the learned counsel for the petitioner and the learned Senior Government Pleader, I am of the opinion that there is considerable merit in the contention of the learned counsel appearing for the petitioner that Ext.P5 does not disclose the reasons for which the registration of the petitioner was cancelled. It only states that the reply given by
WP(C) NO. 25271 OF 2022 4 the tax payer was not satisfactory. It is settled law that an order in the nature of Ext.P5 must be a speaking order and must contain the reasons which compelled the Officer to cancel the registration of the petitioner. The explanation given by the petitioner at Ext.P4 has not been referred to or considered by the Officer while issuing Ext.P5. I am, therefore, of the view that Ext.P5 is liable to be set aside.
Accordingly, this writ petition is allowed. Ext.P5 is quashed. The 2nd respondent shall consider the matter afresh taking note of the observations contained above. In order to enable the 2nd respondent to consider the matter as directed above, the petitioner shall mark appearance before the 2nd respondent at 11.00AM on 11.08.2022.
Sd/- GOPINATH P.
JUDGE DK
WP(C) NO. 25271 OF 2022 5 APPENDIX OF WP(C) 25271/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD. 27-05-2022 Exhibit P2 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD. 27-05-2022 Exhibit P3 COPY OF SHOW CAUSE NOTICE ISSUED BY THE 2ND RESPONDENT DTD. 27-06-2022 Exhibit P4 COPY OF LETTER SUBMITTED BY THE PETITIONER DTD. 30-06-2022 Exhibit P5 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DTD. 13-07-2022