M/S Child Development Welfare Society vs. The Union Of INDIA
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The petitioner, M/s Child Development Welfare Society, is aggrieved by the order dated 08.02.2022 (Annexure-3) cancelling its GST registration. The petitioner filed an appeal, which was rejected due to delay. The petitioner argues that the cancellation order is non-speaking. The revenue submits that the Assessing Officer used form GST REG-19. The Court notes that form GST REG-19 has a specific column for reasons, which was not filled. The cancellation order did not state any reasons and did not refer to the subject of the notice. The Court also considers a notification allowing a further period for revocation of cancellation under certain conditions.
Held
The Court held that the order cancelling the petitioner's GST registration (Annexure-3) 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 noted that form GST REG-19, which was used, has a specific column for assigning reasons, but this was not done. The Assessing Officer appeared to believe that no reasons were required if the assessee did not appear or file an objection. The Court cannot countenance such an order. Consequently, the Court set aside the order at Annexure-3 and directed reconsideration of the issue. The Court also noted Notification No. 3 of 2023, which provides a further period for revocation of cancellation for failure to file returns under Section 29(2)(b) or (c), subject to conditions. The writ petition was allowed.
Key Issues
1. Whether the order cancelling the petitioner's GST registration is a non-speaking order and violates principles of natural justice, as argued by the petitioner? 2. Whether the Assessing Officer erred in not assigning reasons for cancellation, despite the format of form GST REG-19 requiring it, as contended by the petitioner? Petitioner's Arguments: The petitioner argues 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 relies on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. (C.W.J.C. No. 18307 of 2022), which held that non-speaking and cryptic orders violating natural justice principles must be quashed. Revenue's Arguments: The revenue, through the learned counsel for the State, submits that the Assessing Officer adopted form GST REG-19. The judgment does not record any further arguments from the revenue.
Sections Cited
Section 29(2), Section 29
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 20-04-2023
The petitioner is aggrieved with the cancellation of registration by Annexure-3 order dated 08.02.2022. 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.
In such circumstances, we have looked at the order at Annexure-3, 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 3/4 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 at Annexure-3 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.
P.K.P./Anushka (K. Vinod Chandran, CJ) (Madhuresh Prasad, J) AFR/NAFR CAV DATE Uploading Date 25.04.2023 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.