M/S Aryavart Agencies,Lucknow Thru. Proprietor Rajeev Uniyal vs. State Of U.P. Thru. Prin. Secy. Ministry Of Finance,Lko. And 2 Others

Facts

The petitioner, M/s Aryavart Agencies, challenged an order dated February 14, 2023, cancelling its GST registration under Section 29 of the CGST Act, and a subsequent order dated February 5, 2024, dismissing its appeal. The cancellation notice dated January 14, 2023, cited failure to furnish returns for six continuous months under Section 39 of the CGST Act. The petitioner claims it could not reply due to illness and issues with its counsel. The appeal was dismissed by the appellate authority on grounds of limitation, holding that the limitation period starts from the date of the order. The petitioner argued that the cancellation order was non-speaking and lacked application of mind, citing a previous High Court judgment.

Held

The Court allowed the writ petition. It held that the order dated February 14, 2023, cancelling the petitioner's GST registration was liable to be set aside, following the precedent set in M/s Chandrasen (Supra), which held that orders passed without application of mind and lacking reasons do not stand scrutiny under Article 14 of the Constitution. The Court noted that the petitioner had already filed the returns on June 29, 2023, along with the tax and late fees. Consequently, the Court set aside the cancellation order and permitted the petitioner to appear before the respondent authority with a reply to the show cause notice and a certified copy of the High Court's order within three weeks. The respondent authority was directed to pass a fresh order in accordance with the law upon the petitioner's appearance. The issue of the appellate authority's dismissal on limitation was implicitly addressed by setting aside the cancellation order and directing a fresh adjudication.

Key Issues

1. Whether the order dated February 14, 2023, cancelling the petitioner's GST registration is a non-speaking order and thus liable to be set aside under Article 14 of the Constitution of India, as argued by the petitioner? 2. Whether the dismissal of the petitioner's appeal by the appellate authority on grounds of limitation was justified, and if not, whether the doctrine of merger applies, as contended by the petitioner? Petitioner's Arguments: The petitioner contended that the order of cancellation of registration was non-speaking and passed without application of mind, rendering it liable to scrutiny under Article 14 of the Constitution, relying on the High Court's decision in M/s Chandrasen vs. Union of India. The petitioner also argued that since the appeal was dismissed on limitation, the doctrine of merger would not apply, allowing for judicial review of the original cancellation order. Revenue's Arguments: The revenue, through the learned Standing Counsel, informed the Court that the petitioner had already filed the pending returns along with the requisite tax and late fees on June 29, 2023.