Urmila Thumu vs. Joint Commissioner (Appeals -Ii) - GST And Central Tax And 5 Others

Held

The High Court, following its previous decisions in M/s. Chenna Krishnama Charyulu v. Additional Commissioner, Appeals and Nithya Constructions v. Union of India, set aside the order of cancellation of GST registration dated 15.12.2021 passed by Respondent No. 2 and the order-in-appeal dated 19.08.2022 passed by Respondent No. 1. The Court remanded the matter back to Respondent No. 2 for a fresh hearing of the petitioner regarding the cancellation of her GST registration. Respondent No. 2 is directed to pass an appropriate order in accordance with law after hearing the petitioner. The Court directed that this decision be taken within four weeks from the date of receipt of a copy of the order. The ratio decidendi is that in cases of cancellation of GST registration where procedural irregularities or lack of proper hearing are alleged, the matter should be remanded to the primary authority for a fresh decision in accordance with law, especially when previous judgments of the High Court have established this precedent.

Facts

The petitioner, Urmila Thumu, a taxable person under the CGST Act, challenged the cancellation of her GST registration. Respondent No. 2 issued a show cause notice on 18.11.2021, proposing cancellation due to non-filing of GST returns for six months. The petitioner replied on 28.11.2021. However, Respondent No. 2 proceeded to cancel the registration on 15.12.2021, citing non-filing of returns. The petitioner appealed this order to Respondent No. 1, who rejected the appeal on 19.08.2022, finding the petitioner's request not genuine. The petitioner then filed a writ petition before the High Court seeking to quash both orders and revive her GST registration, allowing her to file pending returns.

Key Issues

1. Whether the order of cancellation of GST registration passed by Respondent No. 2, and the subsequent order of rejection of appeal by Respondent No. 1, are without jurisdiction, barred by limitation, and contrary to law, violating principles of natural justice, Article 19(1)(g) and Article 21 of the Constitution of India? (Question of law and mixed fact and law, concerning Section 29 of the CGST Act and principles of natural justice). Petitioner's arguments: The petitioner contended that the cancellation order was without jurisdiction, ex-facie barred by limitation, and arbitrary. She argued it violated the principles of natural justice and constitutional rights. She sought quashing of both orders and revival of her registration. Respondents' arguments: The judgment does not record specific arguments from the respondents. However, their actions (passing the cancellation order and rejecting the appeal) indicate they relied on the petitioner's failure to file GST returns as a valid ground for cancellation under Section 29 of the CGST Act.