Limton Metals LTD. And Anr vs. The Superintendant, Lalbazar Range Iii And Ors

Held

The Court held that the order of cancellation of registration dated February 1, 2024, in Form GST REG-19, was flawed. The Court found that while the order was in the statutory format, it failed to provide any reasons for the cancellation, particularly the retrospective cancellation from December 18, 2021. The Court emphasized that the authority must consider the reply submitted by the assessee to the show cause notice and record reasons in writing, either accepting or rejecting the contentions. The order should be a 'speaking order' and must justify the retrospective cancellation due to its serious consequences. The Court set aside the impugned order and remanded the matter back to the Original Authority. The authority is directed to afford an opportunity of personal hearing to the appellants, peruse the produced documents, and make a fresh decision on merits. The authority may conduct an inspection, including a surprise inspection, if deemed necessary. The authority is directed to fix the date of personal hearing within two weeks of receiving the server copy of the order.

Facts

The appellants, Limton Metals Limited and another, filed an intra-court appeal challenging an order dated June 25, 2024, passed by a learned Single Bench. The appellants had previously challenged an order cancelling their GST registration under the CGST Act, 2017, arguing it violated principles of natural justice and was devoid of reasons. A show cause notice was issued on January 19, 2024, along with a Panchnama containing allegations. The appellants submitted a reply on January 31, 2024. Subsequently, an order dated January 31, 2024, was passed, retrospectively cancelling their registration from December 18, 2021. The appellants claimed they did not receive the enclosures with the order in Form GST REG-19.

Key Issues

1. Whether the order cancelling the appellants' GST registration was in violation of the principles of natural justice and lacked adequate reasoning, as contended by the appellants? 2. Whether the retrospective cancellation of GST registration from December 18, 2021, was justified and supported by sufficient reasons, considering the potential serious consequences for the assessee? Contentions of the Appellants: The appellants argued that the order cancelling their registration was unsustainable in law, being devoid of reasons and in violation of the principles of natural justice. They also stated they did not receive the enclosures along with Form GST REG-19. They contended that the authority failed to consider their reply to the show cause notice and did not provide a speaking order explaining the rationale for cancellation, especially the retrospective aspect. Contentions of the Respondents: The judgment does not record specific contentions made by the respondents (The Superintendent, Lalbazar Range III and Ors.).