M/S Purbey Telecom vs. The Union Of INDIA
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The petitioner, M/s Purbey Telecom, is aggrieved by the cancellation of its GST registration, as per an order dated 07.10.2021 (Annexure-2), passed by the Superintendent Central G.S.T. An appeal filed against this order was rejected due to delay. The petitioner contends that the order of cancellation is non-speaking and lacks reasons. The respondents, represented by the Union of India and its officers, submitted that Form GST REG-19 was adopted by the Assessing Officer. The petitioner further notes the absence of a GST Tribunal for the State of Bihar. The Court examined the order of cancellation and the relevant rules.
Held
The Court held that the order of cancellation of registration (Annexure-2, dated 07.10.2021) is a non-speaking order, lacking any reasons for the cancellation and not even referring 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 found that the Assessing Officer appeared to believe that no reasons need to be assigned if the assessee does not appear or file an objection, which is incorrect. The Court also noted that Form GST REG-19, as per the Bihar Goods and Services Taxes Rules, 2017, requires specific reasons to be assigned. Consequently, the impugned order suffers from illegality. The Court set aside Annexure-2 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 revocation of cancellation for failure to file returns under Section 29(2)(b) or (c), subject to conditions like filing returns and making payments.
Key Issues
1. Whether the order of cancellation of GST registration dated 07.10.2021 (Annexure-2) is a non-speaking order, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the Assessing Officer was justified in issuing a non-speaking order of cancellation, despite the requirements of Form GST REG-19 and the Bihar Goods and Services Taxes Rules, 2017, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the cancellation order is non-speaking, meaning it does not provide any reasons for the cancellation. They relied on a previous judgment of the Patna High Court in Manoj Kumar Sah versus The State of Bihar and Anr. (C.W.J.C. No. 18307 of 2022), which held that such orders violate principles of natural justice and are cryptic. The petitioner also pointed out that Form GST REG-19, adopted by the Assessing Officer, has a specific column for assigning reasons, which was not utilized. Revenue's Arguments: The learned counsel for the State submitted that Form GST REG-19 has been adopted by the Assessing Officer.
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 : 24-04-2023 The petitioner is aggrieved with the cancellation of registration by Annexure-2, order dated 07.10.2021. 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.
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In such circumstances, 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 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 3/4 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 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 Annexure-2, the order dated 07.10.2021 and direct reconsideration of the issue.
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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 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.
sujit/- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE Uploading Date 27.04.2023 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.