M/S J M D Bricks Unit vs. The Union Of INDIA Through The Secretary
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The petitioner, M/s J M D Bricks Unit, is challenging the cancellation of its GST registration by an order dated 12.07.2022. The petitioner filed an appeal against this order, which was rejected due to delay. Subsequently, the petitioner filed a writ petition before the High Court. The petitioner argued that the order of cancellation was non-speaking and lacked reasons. The State submitted that the Assessing Officer adopted form GST REG-19. The Court noted that form GST REG-19 has a specific column for assigning reasons, which was not utilized. The Court also observed that there was no Tribunal constituted for the State under the Bihar Goods and Services Tax Act.
Held
The Court held that the order dated 12.07.2022 cancelling the petitioner's GST registration was a non-speaking order and suffered from illegality. The Court found that the order did not state any reasons for the cancellation and did not even refer to the subject of the notice. This violated the principles of natural justice, as highlighted in the case of Manoj Kumar Sah. The Court set aside the impugned order and directed reconsideration of the issue. Additionally, the Court noted Notification No. 3 of 2023, which allows for revocation of cancellation for failure to file returns under Section 29(2)(b) or (c) of the CGST Act, up to 30.06.2023, subject to filing returns and making payments. The petitioner is entitled to avail this remedy if applicable. The writ petition was allowed.
Key Issues
1. Whether the order cancelling the petitioner's GST registration 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 of registration, despite the format prescribed in form GST REG-19, as contended by the petitioner? The petitioner argued that the order of cancellation was non-speaking, cryptic, and lacked any discernible reason, thus violating the principles of natural justice. The petitioner relied on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. The revenue or State contended that form GST REG-19 was adopted by the Assessing Officer. The judgment does not record any further arguments from the revenue or State.
Sections Cited
Section 29
AI-generated summary — verify with the full judgment below
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-P/2, order dated 12.07.2022. 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-P/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 the order dated 12.07.2022 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.