Abhyuday Press vs. The Additional Commissioner (Appeal)
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The petitioner, Abhyuday Press, filed a writ petition challenging the cancellation of its GST registration, as per an order dated January 13, 2021 (Annexure-2). The petitioner's appeal against this order was rejected, partly due to delay. The petitioner argued that the cancellation order was non-speaking, lacking reasons and failing to refer to the subject of the notice. The revenue contended that the Assessing Officer used form GST REG-19, implying no reasons were required if the assessee did not appear or file an objection. The Court noted the absence of a GST Tribunal for the State.
Held
The Court held that the order cancelling the petitioner's GST registration (Annexure-2) was a non-speaking order and suffered from illegality, as it provided no reasons for the cancellation and did not even refer to the subject of the notice. This violated the principles of natural justice, as established in a previous Division Bench judgment in Manoj Kumar Sah vs. The State of Bihar. The Court found that the Assessing Officer's belief that no reasons are required when an assessee does not appear or file an objection is incorrect, especially when form GST REG-19, which has a specific column for reasons, was used. Consequently, the Court set aside the impugned order and directed reconsideration of the issue. The Court also noted Notification No. 3 of 2023, which allows for the revival of cancelled registrations under certain conditions related to failure to file returns under Section 29(2)(b) or (c), provided returns are filed up to the effective date of cancellation and all dues are paid.
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, particularly in light of the format prescribed by GST REG-19 and the Bihar Goods and Services Taxes Rules, 2017? The petitioner contended that the order at Annexure-2 is non-speaking, lacks reasons for cancellation, and fails to refer to the subject of the notice, thus violating natural justice. The revenue argued that the Assessing Officer adopted form GST REG-19 and that if an assessee does not appear or file an objection, no reasons need to be assigned. The Court also considered Notification No. 3 of 2023 regarding the revival of cancelled registrations for failure to file returns under Section 29(2)(b) or (c).
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 : 20-04-2023
The petitioner is aggrieved with the cancellation of registration by Annexure-2 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-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 2/4 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 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.
3/4
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-2 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 4/4 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
The writ petition stands allowed. sharun/- (K. Vinod Chandran, CJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE N/A Uploading Date 25.04.2023 Transmission Date N/A
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.