M/S. Suvan Engineering Solutions Private Limited vs. The Commissioner (Appeals-Ii)

Held

The High Court set aside both the order of cancellation of GST registration dated December 24, 2020, passed by the Superintendent of Central Tax (second respondent), and the appellate order dated October 13, 2022, passed by the Commissioner (Appeals-II) (first respondent). The Court found that the cancellation order reflected a clear non-application of mind, as it mentioned a reply from the petitioner dated December 24, 2020, on which same day the order was passed, and the petitioner's counsel fairly admitted that no reply was submitted. The appellate authority had not considered this crucial aspect and had dismissed the appeal solely on limitation. The Court, following its previous decisions in similar writ petitions, remanded the matter back to the second respondent for a fresh hearing. The petitioner was granted 15 days to file its reply, after which the second respondent is to pass an appropriate order in accordance with law. The petitioner was also permitted to submit all pending returns. No issue was expressly left undecided.

Facts

The petitioner, M/s. Suvan Engineering Solutions Private Limited, challenged the cancellation of its GST registration. The Superintendent of Central Tax issued a show cause notice on December 15, 2020, for failure to file returns for six months. The petitioner claims to have filed a reply on December 24, 2020, on which day the Superintendent passed the cancellation order. The order stated that no reply was received and best judgment assessment would be initiated. The petitioner's appeal to the Commissioner (Appeals-II) was dismissed on October 13, 2022, on grounds of limitation. The petitioner contended that the cancellation order was arbitrary and illegal, and the appellate order confirmed this illegality. The High Court noted a discrepancy regarding the petitioner's reply.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, passed on the same day as the petitioner's alleged reply to the show cause notice, demonstrates a non-application of mind by the second respondent, contrary to the principles of natural justice? 2. Whether the first respondent erred in dismissing the petitioner's appeal on the grounds of limitation without considering the merits of the cancellation order and the alleged non-application of mind by the second respondent? Petitioner's Arguments: The petitioner argued that the cancellation order dated December 24, 2020, was arbitrary and illegal because it was passed on the same day as their reply, suggesting a lack of proper consideration. They also contended that the appellate authority failed to address this crucial aspect and wrongly dismissed the appeal on limitation. The petitioner relied on previous High Court judgments in similar cases where matters were remanded. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents. However, the order of cancellation by the Superintendent and the dismissal of the appeal by the Commissioner (Appeals-II) represent the revenue's stance.