M/S. Nikky Enterprises vs. The Union Of INDIA

Held

The Court held that the Order for Cancellation of Registration dated 12.09.2022 was not a speaking order, as it failed to consider the petitioner's reply dated 11.09.2022. The Court relied on the Supreme Court's judgment in ORYX Fisheries Private Limited, emphasizing that quasi-judicial authorities must record reasons in support of their conclusions to ensure justice is done and appears to be done, and to prevent arbitrary exercise of power. The Court found that the non-consideration of the petitioner's contentions went to the root of the matter. Consequently, the Court held that the cited precedent by the respondents regarding the belated appeal had no application. The impugned orders dated 22.08.2024 and 03.09.2024 (Order-in-Appeal and FORM GST APL-04), the order dated 12.09.2022 (cancellation of registration), and the order dated 11.08.2022 (show cause notice) were set aside. The matter was remanded to the Superintendent, Danapur, to proceed afresh after due consideration of the petitioner's reply and to complete the proceedings within three months.

Facts

The petitioner, M/s. Nikky Enterprises, filed a writ petition challenging the order of cancellation of its GST registration dated 12.09.2022, passed by the Superintendent, CGST and CX Danapur Range (Respondent No. 6). The registration was cancelled suo motu for non-filing of GST returns for six continuous months. The petitioner had filed a reply to the show cause notice on 11.09.2022. However, the order for cancellation did not consider the petitioner's contentions. Subsequently, the petitioner's appeal against the cancellation order was rejected by the Additional Commissioner (Appeal) (Respondent No. 4) on 22.08.2024, on the grounds of limitation. The petitioner also challenged the Order-in-Appeal dated 22.08.2024 and the subsequent FORM GST APL-04 dated 03.09.2024.

Key Issues

1. Whether the Order for Cancellation of Registration dated 12.09.2022, passed by the Superintendent, CGST and CX Danapur Range, is a speaking order, considering the petitioner's reply dated 11.09.2022 to the show cause notice dated 11.08.2022? The petitioner argued that the cancellation order was passed without considering their reply, violating principles of natural justice and statutory requirements for quasi-judicial functions. The revenue contended that the appeal against the cancellation order was belated and relied on a Coordinate Bench decision affirmed by the Supreme Court. 2. Whether the rejection of the petitioner's appeal by the Additional Commissioner (Appeal) on grounds of limitation is sustainable, given the alleged non-application of mind in the original cancellation order? The petitioner argued that the initial defect in the cancellation order rendered the subsequent appeal rejection unsustainable. The revenue's argument focused on the delay in filing the appeal.