M/S. Ario Infrastructure PVT. LTD. vs. The Union Of INDIA
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The petitioner, M/s. Ario Infrastructure Pvt. Ltd., is challenging an order dated January 13, 2021, which cancelled its GST registration. The petitioner filed an appeal against this order, but it was rejected due to delay. The petitioner then filed a writ petition before the Patna High Court, arguing that the cancellation order was non-speaking. The State submitted that the Assessing Officer used Form GST REG-19. The Court noted that Form GST REG-19 has a specific column for reasons, which was not filled in the impugned order. The Court also referred to a previous judgment of the same High Court in Manoj Kumar Sah versus The State of Bihar and Anr. which dealt with a similar non-speaking order.
Held
The Court held that the order cancelling the petitioner's GST registration (Annexure-4) is a non-speaking order and suffers from illegality. The Court found that the order provided no reasons for the cancellation and did not even refer to the subject of the notice. This violates the principles of natural justice, as established in the case of Manoj Kumar Sah versus The State of Bihar and Anr. The Court observed that Form GST REG-19, despite having a specific column for reasons, was not utilized to provide any justification for the cancellation. The Court also took note of Notification No. 3 of 2023, which provides a further period 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) of the CGST Act, subject to certain conditions. The Court set aside the impugned order and directed reconsideration of the issue. The writ petition was allowed.
Key Issues
1. Whether the order cancelling the petitioner's GST registration, dated January 13, 2021 (Annexure-4), is a non-speaking order violating principles of natural justice, as argued by the petitioner? 2. Whether the Assessing Officer erred by not assigning reasons in Form GST REG-19 for the cancellation of registration, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the order of cancellation of registration is non-speaking, meaning it does not provide any reasons for the decision. This violates the principles of natural justice. The petitioner also highlighted that Form GST REG-19, which was used by the Assessing Officer, has a specific column for assigning reasons, and this column was left blank in the impugned order. Revenue's Arguments: The State submitted that Form GST REG-19 has been adopted by the Assessing Officer. The judgment does not record any further specific arguments from the revenue regarding the non-speaking nature of the order or the absence of reasons.
Sections Cited
Section 29(2)(b), Section 29(2)(c)
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 25-04-2023
The petitioner is aggrieved with the cancellation of registration by Annexure- 4 order dated 13.01.2021. An appeal was filed which was delayed, which also stood rejected. Insofar as the Bihar Goods and Services Tax Act is concerned, now there is no Tribunal constituted for the State.
In such circumstances, we have looked at the order at Annexure- 4, especially since the learned counsel for the 2/4 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 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 3/4 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 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 at Annexure- 4 and direct reconsideration of the issue.
In this context, we also notice that notification No.
4/4 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 invocation 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 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.
rajkishore/- (K. Vinod Chandran, CJ) (Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 26 .04.2023 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.