Sri. Subal Majumdar vs. Secretary Of Finance Dept
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The petitioner, Sri. Subal Majumdar, filed a writ petition challenging an order dated 04.02.2023 passed by the Assistant Commissioner of Commercial Taxes (Audit)-3, which cancelled his GST registration. The petitioner contended that the cancellation order dated 08.11.2022 was violative of natural justice as he was not granted a sufficient opportunity to reply to the show cause notice, especially without a personal hearing. He also stated that due to unavoidable circumstances, he could not submit his reply. The petitioner further referred to an Intimation of Tax under Section 73(5) of the KGST Act, 2017, dated 12.07.2023, suggesting an opportunity to file a reply was contemplated. The respondents argued that the petition lacked merit.
Held
The Court held that the impugned GST cancellation order dated 08.11.2022 was passed without noticing that the petitioner had submitted a reply to the show cause notice. Adopting a justice-oriented approach and to provide one more opportunity to the petitioner, the Court set aside the impugned order dated 04.02.2023 (Annexure-E) and remitted the matter back to the respondents for reconsideration. The Court found that the petitioner would be entitled to submit his reply to the Intimation of Tax under Section 73(5) of the KGST Act and contest any further proceedings, including show cause notices under Section 73(1) of the KGST Act. The petitioner was permitted to submit his reply to the show cause notice dated 08.11.2022 and the Intimation of Tax dated 12.07.2023 within four weeks. The respondents were directed to consider these replies, provide a personal hearing, and proceed in accordance with the law. The GST registration of the petitioner was restored.
Key Issues
1. Whether the order dated 08.11.2022 cancelling the petitioner's GST registration, passed by Respondent No. 2, is violative of the principles of natural justice, specifically concerning the opportunity to be heard and file a reply to the show cause notice, thereby attracting the provisions of Section 73 of the KGST Act, 2017? Petitioner's arguments: The petitioner argued that the cancellation of his GST registration was in violation of natural justice principles because he was not afforded a sufficient or reasonable opportunity to respond to the show cause notice, and crucially, no personal hearing was granted. He claimed that due to bonafide reasons and unavoidable circumstances, he was unable to submit his reply to the show cause notice dated 08.11.2022, which led to the cancellation. The petitioner also highlighted that an Intimation of Tax under Section 73(5) of the KGST Act, 2017, implied an opportunity to file a reply. Respondents' arguments: The learned HCGP for the respondents contended that the petition had no merit and was liable to be dismissed.
Sections Cited
Section 73(5), Section 73(1), KGST Act, 2017
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Cause title — parties, addresses and appearances
ORDER
In this petition, petitioner seeks for the following reliefs:-
“ (i) Issue Writ of Certiorari or in the like nature of Certiorari quashing the order dated: 04.02.2023 vide ref no. ZA2908223025139, passed by respondent No.2 vide Annexure-E;
(ii) Issue Writ of Mandamus or Writ of direction to the respondent authorities to refrain from further proceedings and take such necessary /measures/ steps in respect of the order dated: 12.07.2023, vide ref no. ACCT(A)- 3.10/A.73/570/2023-24, passed by respondent No.2, vide Annexure-B;
(iii) Issue Writ of Prohibition, not to proceed further steps in activities of the registration certificate, directing the respondent authorities to refrain from further coercive steps as per order dated: 12.07.2023, passed in Annexure-B; vide ref No. ACCT(A)-3.10/A.73/570/2023-24, passed by respondent No.2. (iv) Pass such other or further orders as this Hon’ble court may deem fit in the facts and circumstances of this case, in the interest of justice and equity.”
Heard learned counsel for the petitioner and learned HCGP for the respondents and perused the material on record. NC: 2024:KHC:2103
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the order dated 08.11.2022 at Annexure-C canceling the GST registration of the petitioner is violative of principles of natural justice, since no sufficient or reasonable opportunity was granted before canceling the registration, particularly when no personal hearing was granted to the petitioner. It is also submitted that due to bonafide reasons, unavoidable circumstances and sufficient cause, it was not possible for the petitioner to submit his reply to the show cause notice dated 08.11.2022, as a result of which, the GST registration of the petitioner was cancelled by the respondents.
1 Learned counsel for the petitioner also invited my attention to the impugned Intimation of Tax under Section 73(5) of the KGST Act, 2017 dated 12.07.2023 in order to point out that an opportunity to file reply, documents etc., may be granted in favour of the petitioner.
Per contra, learned HCGP for the respondents submit that there is no merit in the petition and that the same is liable to be dismissed. NC: 2024:KHC:2103
A perusal of the impugned GST cancellation order dated 08.11.2022 will indicate that the sole ground on which the respondents have proceeded to cancel the GST registration is without noticing the fact that the petitioner has submitted his reply to the show cause notice dated 08.11.2022. Under these circumstances, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner to submit his reply to the show cause notice and to contest the cancellation proceedings, I deem it just and appropriate to set aside the impugned order at Annexure-E dated 04.02.2023 and remit the matter back to the respondents for reconsideration afresh in accordance with law. Insofar as the Intimation of Tax under Section 73(5) of the KGST Act is concerned, it is needless to state that the petitioner would be entitled to submit his reply to the same and contest any further proceedings including the show cause notice, if any, to be issued under Section 73(1) of the KGST Act in accordance with law.
In the result, I pass the following:- ORDER
(i) Petition is hereby allowed. NC: 2024:KHC:2103 (ii) The impugned order at Annexure-E dated 04.02.2023 is hereby set aside.
(iii) Consequently, the GST registration of the petitioner stands restored with immediate effect.
(iv) The petitioner is permitted to submit his reply to the show cause notice dated 08.11.2022 along with documents, details etc., within a period of four weeks from today.
(v) Liberty is also reserved in favour of the petitioner to submit his reply along with documents, details etc., to the Intimation of Tax dated 12.07.2023 at Annexure-B within a period of four weeks from today.
(vi) The respondents are directed to consider the said reply, documents, details etc., furnished by the petitioner to the Tax Intimation dated 12.07.2023 and the show cause notice dated 08.11.2022 and proceed further in accordance with law after providing an opportunity of personal hearing to the petitioner. JUDGE
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Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.