M/S. Hindustan Organics vs. The State Of Ap
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Cause title — parties, addresses and appearances
The Court made the following: ORDER Between: M/s. Hiridustan Organics, Auto Nagar Musjid, Sy.No.524, Plot No.313A, 313B, Auto Udi^alpuram, R Part, Kurnool, rep. by its. Proprietor, Shaik Showkath Ali, S/o. Shaik Dada Peer, aged about 41 years, Nandyal District. ...PETITIONER AND 1. The State of AP, Rep. by its Principal Secretary to Government Revenue (CT) Department, Secretariat, Velagapudi, Amaravathi, Guntur District.
The Deputy Assistant Commissioner (ST), Nandyal -1. Nandyal District.
The Joint Commissioner (ST), Kurnool Division, Kurnool.
The Deputy Commissioner (ST), Large Tax Payers Unit, Kurnool Division, Kurnool ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction particularly in the nature of Writ of MANDAMUS declaring the impugned proceedings dt.03-08-2023 vide Annexure PI for cancellation of. Registration Certificate with consequential, blocking of input tax credit as illegal, arbitrary, unfair, improper and in violation of the principles of natural justice and contrary to the provisions of Sec 29 R/w Rule 21 of the CGST Act, 2017/CGST Rules, 2017. lA NO: 1 OF 2023
WRIT PETITION No.22588 of 2023
Challenging the cancellation of Registration Certificate vide order dated 03.08.2023 passed by the Deputy Assistant Commissioner (ST), Nandyal-I/ 2"^ respondent, present Writ Petition is filed. HON’BLE SRI JUSTICE U.DURGA PRASAD RAO AND HON’BLE SRI JUSTICE A.V.RAVINDRA BABU Heard Sri Dr.M.V.K. Moorthy, learned senior counsel appearing for the petitioner and learned Government Pleader for Commercial Tax representing the respondents. Learned senior counsel submits that the 2"^ respondent issued show cause notice dated 12.06.2023 alleging that the petitioner has committed fraud, willful misstatement or suppression of facts in terms of Section 29(2)(e) of CGST/SGST Act; alleged that the person issued invoices or bills without supply of goods or services or both in violation of the Rule 21(b) of the Act and also alleged that the petitioner avails ITC in violation of the provisions of Section 16 of the Act and also violated the provisions of Rules 86B and 21 (g), without furnishing their requisite particulars. ORDER: (per Hon’ble Sri Justice U.Durga Prasad Rao)
! 2 4. 5. 6. Learned senior counsel further submits that while issuing show cause notice, dated 12.06.2023 GST registration of the petitioher was put under suspension with immediate effect i.e., on 12.06.2023. He further contends that though notice is ciyptic, the petitioner in due compliance of the notice submitted his reply/explanation on 06.07.2023 furnishing the required particulars to the extent possible as against the allegations contained in the show cause notice. Pursuant thereof, the cancellation order has been passed. Learned Government Pleader supported the impugned show cause notice dated 12.06.2023 and the final order dated 03.08.2023, stating that both of them contain sufficient particulars and the petitioner Learned senior counsel also submits that the impugned order of cancellation of Registration came to be passed on 03.08.2023 by the 1“ respondent, without referring and taking into consideration the explanation dated 06.07.2023 offered by the petitioner. Learned counsel would thus submit that by issuing the cryptic show cause notice and passing final order without referring to the explanation of the petitioner and without affording an opportunity of hearing to the petitioner, the 1“ respondent committed violation of principles of natural justice. He thus sought to set aside the impugned order.
3 of required particulars. 7. i) not possible for the petitioner to 4 ii) petitioner? If Points 1 and 2 are held in affirmation, whether there Points (i) to (iii):- 8. has also submitted his explanation to the show cause notice, and therefore, now it cannot be pleaded that the show cause notice is bereft The points for consideration are, I Whether the show cause notice is devoid of required iii) occurred violation of, principles of natural justice? As all these points are inter connected, they are considered and answered together. We have perused the show cause notice dated 12.06.2023 issued by the I.* respondent. Since the show cause notice is a brief one, the same is reproduced here for the sake of convenience: particulars, and thereby, it was furnish/offer detailed explanation? Whether, in the final order of cancellation of Registration dated 03.08.2023, the 1.®* respondent has not referred and considered the explanation dated 06.07.2023 offered by the 4 « my notice, it appears willful 3. 9. as to the 1 Please note that 12.06.2023." cause notice, so far as the 1** respondent only mentioned that the registration was allegedly obtained misstatement or suppression of facts. relevant requisite facts As can be seen from the show allegation is concerned, the 1®* Whereas on the basis of information which has come to i that your registration is liable to be cancelled for the following reasons:
Section 29(2)(e)-registration obtained by means of fraud, misstatement or suppression of fact.
Rule 21(b) - person issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act. or the rules made thereunder. Rule 21(e)-person avails ITC in violation of the provisions of section 16 of the Act or the rules made thereunder.
Rule 21(g)- person violates the provision of rule 86B Your are hereby directed to furnish a repiy to the notice within seven working days from the date of service of this notice. If you fall Io furnish a reply within the stipulated dale or fall to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on ments. your registration stands suspended with effect from by means of fraud, willful However, there are no other mentioned in the said allegation manner how the petitioner committed fraud or wiiifui misstatement or suppression of the facts relating to his obtaining registration. In the present form of allegation, it wH be difficult for anybody including the 5 CGST/AGST Act. allegation is also .as vague as to the petitioner to submit his explanation in a proper manner. petitioner to offer his explanation to the said allegation No.
Therefore, as rightly submitted by the learned senior counsel for the petitioner, said allegation is vague and bereft of relevant particulars.
The third allegation is to the effect that in terms of Rule 21(e), ‘person’ avails ITC in violation of provisions of Section 16 of the Act. This allegation is also not clear as to what is the nature of the violation of the provisions, committed by the petitioner under Section 16 of 12. So also the allegation No.4 is to the effect that in terms of Rule 21(g) the assessee has allegedly violated the provisions of rule 86B is bereft of relevant particulars. Thus as can be seen, the show cause
In so far as the second allegation is concerned, it is stated, the ‘person’ issued invoice or bill without supplying goods or services are both, in violation of the provisions of this Act and the rules made thereunder. Here also the said allegation is not clear enough to communicate whether the “person’ means the petitioner herein or, his vendors and particulars of fake invoices and bills. Therefore, this it could be without giving an opportunity
6 4 notice is not reflecting the necessary particulars to enable the petitioner to offer his explanation. 13. 14. respondent, in issuing the show cause notice without necessary details and passing the final order of cancellation of Registration, not followed the principles of natural justice, and therefore, the show cause notice dated 12.06.2023 as well as the final order dated 03.08.2023 are liable to be set aside and are accordingly set aside. The the petitioner seems to have offered his remarks to the extent possible, in respect of each allegation made in the show cause notice. Then the We have gone through the explanation dated 06.07.2023, a copy of which filed along with material papers. Said explanation shows that respondent authorities are directed to restore the registration of the petitioner, within a period of one week from the date of receipt of a copy of this order. We must make it clear that this order will not preclude the respondents to issue a fresh show cause notice with necessary particulars and to proceed in accordance with law. Thus, on a conspectus of the facts, we are of the considered view that the 1®‘ final order dated 03.08.2023 shows, curiously said explanation was neither referred in the said order nor the merits of the explanation are considered by the 1®* respondent.
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The Writ Petition is disposed of accordingly. No costs. As a sequel, interlocutory applications pending, if any, in this case shall stand closed. //// N NAGAMMA ASSISTANT REGISTRAR ^SEC^tfi%FnCER
The Principal Secretary to Government Revenue (CT) Department, State of AP, Secretariat, Velagapudi, Amaravathi, Guntur District.
The Deputy Assistant Commissioner (ST), Nandyal -1. Nandyal District.
The Joint Commissioner (ST), Kurnool Division, Kurnool.
The Deputy Commissioner (ST), Large Tax Payers' Unit, Kurnool Division, Kurnool
One CC to SRI. M V J K KUMAR Advocate [OPUC]
Two CCs to GP FOR COMMERCIAL TAX ,High Court of Andhra Pradesh. [OUT]
Two CD Copies Madhu
HIGH COURT DATED:15/09/2023 ORDER WP.No.22588 of 2023 DISPOSING THE WP WITHOUT COSTS V nili a i 1 SEP Xl?3
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.