Bajrang Lal Dargarh vs. Union Of INDIA And Ors.
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The petitioner, Bajrang Lal Dargarh, filed a writ petition challenging an order dated May 17, 2024, cancelling his GST registration, effective from June 16, 2020. The cancellation order was based on a show cause notice issued on June 16, 2020, alleging fraud, willful misstatement, or suppression of facts. The petitioner contended that he had responded to the show cause notice and that the respondents had subsequently allowed several amendments to his registration particulars, including changes to his place of business, on December 31, 2021, March 27, 2022, and July 16, 2022. The petitioner argued that given these amendments were allowed, there was no basis for the cancellation order issued much later. The respondents, CGST authorities, initially stated that the order was passed due to the petitioner not filing a response.
Held
The Court held that the order of cancellation of registration dated May 17, 2024, could not be sustained. The Court noted that while the CGST authorities argued the order was passed due to the petitioner not filing a response, and this was denied by the petitioner, the crucial fact was that the respondents had, from time to time, allowed amendment applications concerning the petitioner's place of business. The impugned order of cancellation was cryptic and did not assign any reasons. It failed to reflect that the proper officer had taken note of its previous orders whereby the amendment applications were allowed. Therefore, a detailed and reasoned order ought to have been passed, considering the prior approvals. The Court set aside the impugned order and remanded the matter back to the proper officer. The petitioner was granted liberty to file a response, and the proper officer was directed to restore the petitioner's registration on the portal for this purpose. The registration was to be restored within one week, and the response was to be filed within two weeks thereafter. The proper officer was directed to hear the petitioner and decide the show cause notice by passing a reasoned order.
Key Issues
1. Whether the order of cancellation of GST registration dated May 17, 2024, is sustainable in light of the respondents having previously allowed amendments to the petitioner's registration particulars, including the place of business, after the issuance of the show cause notice dated June 16, 2020? (Question of law and fact, concerning the principles of natural justice and administrative consistency). Petitioner's arguments: The petitioner argued that the cancellation order was unjustified because the authorities had, by allowing multiple amendments to his registration details after the show cause notice was issued, implicitly acknowledged the correctness of his updated particulars. The subsequent cancellation, therefore, contradicted the earlier actions of the respondents. The petitioner relied on the fact that amendments were permitted, indicating a lack of fraud or willful misstatement. Revenue's arguments: The learned advocate for the CGST authorities submitted that the cancellation order was passed due to the petitioner not filing any response to the show cause notice. However, this contention was denied by the petitioner.
Sections Cited
CGST Act, 2017, WBGST Act, 2017
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2025 Item No. AD 2 Saswata
WPA 25093 of 2024 Bajrang Lal Dargarh versus Union of India & Ors. Mr. Sweta Mukherjee …For the petitioner Mr.Kaushik Dey Mr. Tapan Bhanja ..For the CGST authorities
The instant writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner under the CGST/WBGST Act, 2017 (hereinafter referred to as the “said Act”) dated 17th May 2024 with effect from 16th June 2020 being the date on which the show cause notice was issued.
When the matter was previously taken up by order dated 3rd April 2025, this Court was, inter alia, pleased to record as follows:- 1. “Affidavit of service filed in Court today is taken on record.
The instant writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner under the Central/West Bengal Goods and Services Tax Act, 2017 dated 17th May, 2024 with effect from 16th June, 2020, being the date on which the show cause notice was issued.
Ms.
Mukherjee,
learned
advocate representing the petitioner by placing before this Court the show cause notice dated 16th June, 2020 would submit that the said notice was duly responded to by the petitioner. Subsequently, on 31st December, 2021, at the instance of the petitioner, the registration particulars were permitted to be amended whereby the petitioner’s place of business was shifted from the first floor to second floor of the same building where the petitioner was housed. Ms. Mukherjee would submit that after the portion which the petitioner was originally occupying was repaired the petitioner has been shifted back to its original location in the same building and the petitioner having applied for the amendment of the registration particulars, the same was allowed by an order dated 27th March, 2022 and still later further amendment was allowed by an order dated 16th July, 2022. Having regard thereto, she would submit that there was no cause for the respondents to 2 issue the order of cancellation on 17th May, 2024, in respect of the show cause notice dated 16th June, 2020. 4. Mr. Bhanja, learned advocate who usually appears on behalf of the respondent CGST authorities is present in Court. I direct Mr. Bhanja, learned advocate, to take appropriate instruction in the matter. Let his appointment be regularized.
Let a copy of the writ petition be served on Mr. Bhanja in course of this day.
Since, Mr. Bhanja would pray for an accommodation, let this matter stand adjourned and appear in the daily supplementary list on 21st April, 2025. 3. Today the learned advocate for the parties have made their submissions.
Heard the learned advocates appearing for the respective parties and considered the materials on record. It would prima facie transpire that after the show cause notice was issued on 16th June, 2020, at the instance of the petitioner from time to time, the respondents have permitted the petitioner to amend the petitioner’s registered place of business. It would also transpire from paragraph 4 of the instant writ petition that the petitioner had met with the respondent no. 2 and submitted the documents in support of its proof of business. It, however, appears that the show cause notice dated 16th June 2020 that the same has been issued on the ground that the registration has been obtained by means of fraud, willful mis-statement or suppression of facts. Unfortunately, despite the respondents from time to time allowing the amendment applications as noted above, have purported to cancel the registration of the petitioner by a cryptic order dated 17th May 2024. No reasons whatsoever had been assigned.
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Although, Mr. Dey learned advocate appearing for the CGST authorities has submitted that by reasons of the petitioner not filing any response, the aforesaid order has been passed and though such contention has been denied by Ms. Mukherjee, learned advocate appearing for the petitioner, without going into the correctness thereof, and having regard to the fact that the respondent no. 2 having allowed the amendment applications, a detailed order ought to have been passed. The order impugned does not reflect the fact that the proper officer had taken note of its previous orders whereby the amendment applications were allowed.
Having regard thereto, the order dated 17th May 2024 cannot be sustained and the same is accordingly set aside. The matter is remanded back to the proper officer.
The petitioner shall be at liberty to file appropriate response both physically and electronically and for the said purpose, the proper officer is directed to restore the petitioner’s registration on the portal for the petitioner to file its response.
The restoration of the registration should be effected within a period of one week from the date of communication of this order. The response shall be filed within two weeks thereafter. The proper officer shall upon giving an opportunity of hearing to the petitioner, shall hear out and decide the above show cause dated 16th June 2020 by passing a reasoned order.
With the above observations and directions, the writ petition is disposed of.
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All parties shall act on the basis of the server copy of this order duly downloaded from this Court’s official website. (Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.