Maa Construction vs. The State Of Bihar

Facts

The petitioner, Maa Construction, is challenging an order dated 01.04.2022 for the cancellation of its GST registration. The petitioner filed an appeal against this order, but it was rejected due to delay. The petitioner then approached the High Court, arguing that the cancellation order was non-speaking. The State submitted that the Assessing Officer used form GST REG-19. The Court noted that GST REG-19 has a specific column for reasons, which was not filled. The Court also observed that there is currently no GST Tribunal constituted in Bihar. The petitioner is aggrieved by the order of cancellation of registration and the subsequent rejection of its delayed appeal.

Held

The Court held that the order dated 01.04.2022 cancelling the petitioner's GST registration is a non-speaking order, as it fails to provide any reasons for the cancellation and does 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 found that the Assessing Officer seemed to believe that no reasons need to be assigned if the assessee does not appear or file an objection, which is incorrect given the specific column for reasons in form GST REG-19. The Court also noted the availability of a remedy under notification No. 3 of 2023 for revocation of cancellation under certain conditions, particularly for failures related to filing returns under Section 29(2)(b) or (c) of the CGST Act, with a deadline of 30.06.2023, subject to filing returns and making payments. The Court set aside the impugned order and directed reconsideration of the issue. The writ petition was allowed.

Key Issues

1. Whether the order dated 01.04.2022 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 correctly followed the procedure prescribed in form GST REG-19 and the Bihar Goods and Services Taxes Rules, 2017, when passing the cancellation order, as contended by the State? Petitioner's Arguments: The petitioner argued that the order of cancellation of registration dated 01.04.2022 is a non-speaking order, lacking any reasons for the cancellation. The petitioner contended that this violates the principles of natural justice, especially since the order entails civil and penal consequences. 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 similar orders to be cryptic and violative of natural justice. Respondent's Arguments: The State submitted that the Assessing Officer adopted form GST REG-19. The State did not explicitly argue that the order was speaking or that principles of natural justice were not violated, but rather indicated the form used.