Tushar Agarwal vs. Union Of INDIA And 2 Ors
Original PDF →Facts
The Petitioner, Tushar Agarwal, was granted GST registration on September 27, 2019. Due to financial hardship, he failed to file his GST returns. Consequently, the Superintendent of Central Goods and Service Tax, Sivasagar Range-1 (Respondent No. 3), issued a Show Cause notice on March 2, 2023, proposing cancellation of registration for non-filing of returns under Section 39 of the CGST Act, 2017. The notice also stated that the Petitioner's registration was suspended from March 2, 2023. The Petitioner claims to have filed his returns thereafter. However, on April 10, 2023, Respondent No. 3 cancelled the registration with the sole reason "Registration is cancelled". The Petitioner filed the present writ petition challenging this cancellation order.
Held
The Court held that the impugned order dated April 10, 2023, cancelling the Petitioner's GST registration, was unsustainable. The Court found it "shocking" that the order was passed with the reason "Registration is cancelled," indicating a total non-application of mind and a lack of justifiable reasons. The Court emphasized that the order, passed by a quasi-judicial authority, entails civil consequences for the Petitioner, as it prevents him from carrying out his business. Therefore, the Court set aside the cancellation order. The Court also noted that the Petitioner had filed his returns in the meantime and directed that this aspect, along with any other grounds the Petitioner deems fit, be considered by Respondent No. 3. The Petitioner was granted liberty to file an additional reply to the Show Cause notice within 10 days, after which Respondent No. 3 was to take due steps in accordance with law. The status was restored to the date of the Show Cause notice.
Key Issues
1. Whether the order cancelling the Petitioner's GST registration, passed by Respondent No. 3 on April 10, 2023, is sustainable in law, considering it provides no reasons beyond stating 'Registration is cancelled' and fails to demonstrate application of mind, thereby violating principles of natural justice and Section 39 of the CGST Act, 2017? Petitioner's Arguments: The Petitioner argued that the cancellation order is arbitrary, lacks application of mind, and is devoid of any justifiable reasons, making it unsustainable. The Petitioner also contended that he had subsequently filed his returns, a fact that should have been considered. The Petitioner relied on the principle that quasi-judicial orders with civil consequences must be reasoned. Revenue's Arguments: The judgment does not record any specific arguments made by the Revenue or the Respondent authorities.
Sections Cited
Section 39
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER Date : 09.08.2024
The instant writ petition is filed challenging the order bearing No.ZA180423006728I dated 10.04.2023 passed by the Respondent No.3 cancelling the GST Registration of the Petitioner.
The facts as could be discerned from a perusal of the writ petition are that the Petitioner herein was granted a registration under the Central Goods and Services Tax Act, 2017 and was issued a certificate of 27.09.2019. However, as stated in the writ petition that on account of acute financial hardship, the Petitioner could not file his return. A Show Cause notice was issued on 02.03.2023 by the Respondent No.3 asking the Petitioner to Show Cause as to why his registration should not be cancelled for not filing the returns under Section 39 of the Central Goods and Services Tax Act, 2017. In the said Show Cause notice, it was also mentioned that the Registration of the Petitioner was suspended w.e.f. 02.03.2023. It is not known as to what Show Cause reply the Petitioner has filed as the said reply to the Show Cause notice is not a part of the records.
Be that as it may, on 10.04.2023, the Respondent No.3 cancelled the registration on the ground “Registration is cancelled”. It is also seen from the records that the Petitioner claims that he had filed his returns thereafter in terms with Section 39 of the CGST Act, 2017. Thereupon, the instant writ petition has been filed by the Petitioner challenging the order of cancellation dated 10.04.2023. Page No.# 3/4
I have heard the learned counsels for the parties and also perused the materials on record.
A perusal of the impugned order dated 10.04.2023 would show that the said order is passed by a quasi judicial authority. The effect of the said order would be that in absence of a registration, the Petitioner cannot carry out his business. Therefore, the effect of the said impugned order would entail civil consequences.
In the backdrop of the said, if this Court peruses the order, it is shocking that the Respondent No.3 had cancelled the registration by giving a reason that the “Registration is cancelled”. This clearly shows a total non-application of mind apart from the fact that the impugned order is devoid of any justifiable reasons. Accordingly, this Court therefore sets aside the said impugned order dated 10.04.2023 thereby restoring the status back to the date on which the Show Cause notice dated 02.03.2023 was issued.
The learned counsel for the Petitioner further submits that in the meantime, the Petitioner had already filed his returns. This aspect of the matter can very well be taken note of by the Respondent No.3 for which liberty is given to the Petitioner to file an additional reply to the said Show Cause notice bringing to the notice of the Respondent No.3 about the filing of the returns as well as any other grounds which the Petitioner deems fit and proper. The said exercise be done within a period of 10 (ten) days from today and thereupon, the Respondent No.3 shall take due steps in accordance with law.
Accordingly, the instant writ petition stands disposed of in terms
Page No.# 4/4 with the observations and directions made hereinabove.
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.