Shivdhari Infrastructure And Housing Projects Nirman P. LTD. vs. The Union Of INDIA
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The petitioner, Shivdhari Infrastructure and Housing Projects Nirman P. Ltd., is challenging the cancellation of its GST registration by an order dated 08.08.2021, passed by the Assistant Commissioner of State Tax, South Patna (Respondent No. 4). The petitioner contends that the order is non-speaking and lacks any reasons for the cancellation. The State submitted that the Assessing Officer adopted the form GST REG-19. The Court noted that GST REG-19 has a specific column for reasons, which was not utilized. The petitioner is aggrieved by this order of cancellation.
Held
The Court held that the impugned order dated 08.08.2021, cancelling the petitioner's GST registration, is a non-speaking order and suffers from the same illegality as pointed out in the case of Manoj Kumar Sah versus The State of Bihar and Anr. The Court found that the order lacked any stated reasons for the cancellation and did not even refer to the subject of the notice. The Court noted that while form GST REG-19 has a specific column for reasons, the Assessing Officer appeared to believe no reasons were necessary if the assessee did not appear or file an objection. The Court set aside the order dated 08.08.2021 and directed reconsideration of the issue. Additionally, the Court took note of Notification No. 3 of 2023, which allows a further period up to 30.06.2023 for registered persons to apply for revocation of cancellation if it was effected for failure to file returns under Section 29(2)(b) or (c), subject to conditions.
Key Issues
1. Whether the order cancelling the petitioner's GST registration, dated 08.08.2021, is a non-speaking order violating principles of natural justice, as argued by the petitioner? 2. Whether the Assessing Officer erred in not assigning reasons for cancellation when the form GST REG-19, as per Bihar Goods and Services Taxes Rules, 2017, requires specific reasons to be assigned, as argued by the petitioner? The petitioner argued that the impugned order is non-speaking, cryptic, and lacks decipherable reasons for cancellation, thus violating principles of natural justice and entailing civil and penal consequences. The petitioner relied on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. The State submitted that the Assessing Officer adopted the form GST REG-19.
Sections Cited
Section 29
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 12-05-2023 The petitioner is aggrieved with the cancellation of registration by Annexure- 2, order dated 08.08.2021. 2. We have looked at the order at Annexure- 2, especially since the learned counsel for the petitioner has argued that it is a non-speaking order. We see from the order that there is no reason stated as to why the cancellation was ordered and not even the subject of the notice is referred to in the order.
It is the submission of the learned counsel for the State 2/4 that the form GST REG-19 has been adopted by the Assessing Officer.
We extract form GST REG-19:-
As we see from the Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.
We cannot countenance the said order, especially when there is absolutely no reason stated regarding the cancellation of registration.
We also notice the judgment of another Hon'ble 3/4 Division Bench of this Court passed in Manoj Kumar Sah versus The State of Bihar and Anr. in C.W.J.C. No. 18307 of 2022, wherein it has been stated so:- " It cannot be disputed that with the passing of the said order, petitioner is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only the order is non- speaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences. "
The impugned order in the instant writ petition also suffers from the very same illegality which has been pointed out by the Division Bench. In such circumstances, we set aside the order dated 08.08.2021 and direct reconsideration of the issue.
In this context, we also notice that notification No. 3 of 2023 has been brought in by the Central Government on the recommendations of the G.S.T. Council wherein if the cancellation has been effected for failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29, there is a further period allowed up to 30.06.2023, wherein the registered person can apply for revocation of cancellation. This is also subject to the condition that the return should be filed up to the effective date of cancellation of registration and the 4/4 payment of tax, interest, penalty and late fee in respect of such returns have also been made. The assessee would also be entitled to avail of the said remedy if the cancellation has been effected under clause (b) or clause (c) of Sub-section (2) of Section 29. 10. The writ petition stands allowed.
Raj kishore/ Shyam Bihari/- (K. Vinod Chandran, CJ) (Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 16.05.2023. Transmission Date
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.