M/S Umesh Bricks vs. The State Of Bihar

Facts

The petitioner, M/s Umesh Bricks, is challenging an order dated 26.07.2021 that cancelled its GST registration. The petitioner filed an appeal against this order, but it was rejected due to delay. The petitioner then filed a writ petition before the High Court. The petitioner's counsel argued that the cancellation order was non-speaking. The State's counsel submitted that the Assessing Officer adopted Form GST REG-19. The Court observed that Form GST REG-19 requires reasons to be assigned, but the Assessing Officer appeared to believe no reasons were necessary if the assessee did not appear or file an objection.

Held

The Court held that the order dated 26.07.2021 cancelling the petitioner's GST registration was a non-speaking order, lacking any reasons for the cancellation. This was found to be in violation of the principles of natural justice, as the order did not even refer to the subject of the notice. The Court noted that Form GST REG-19, as per the Bihar Goods and Services Taxes Rules, 2017, has a specific column for assigning reasons, which was not followed. The Court found the order to be suffering from the same illegality pointed out in the case of Manoj Kumar Sah versus The State of Bihar and Anr. Consequently, the Court set aside the impugned order and directed reconsideration of the issue. The Court also took note of Notification No. 3 of 2023, which allows a further period for revocation of cancellation for certain failures to file returns, subject to conditions, and stated that the assessee would be entitled to avail of this remedy if applicable.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is a non-speaking order and thus violates principles of natural justice, as argued by the petitioner? 2. Whether the Assessing Officer erred in not assigning reasons for the cancellation of registration, despite the requirements of Form GST REG-19 and the Bihar Goods and Services Taxes Rules, 2017, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the order of cancellation of registration was non-speaking, meaning it did not provide any reasons for the decision. This, according to the petitioner, violates the principles of natural justice. The petitioner relied 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 a non-speaking and cryptic order, where reasons are not decipherable, violates natural justice and entails penal and pecuniary consequences. Revenue's Arguments: The learned counsel for the State submitted that the Assessing Officer adopted Form GST REG-19. The judgment does not record any further arguments from the State.