M/S Mask Advertising, Hem Plaza, Frazer Road, Patna vs. The State Of Bihar Through The Commissioner

Facts

The petitioner, M/s Mask Advertising, is challenging an order dated January 22, 2020, which 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, arguing that the cancellation order was non-speaking. The State contended that the Assessing Officer adopted the form GST REG-19. The Court noted that GST REG-19 has a specific column for reasons, which was not filled in the impugned order. The Court also referred to a previous judgment in Manoj Kumar Sah versus The State of Bihar and Anr., which highlighted similar issues with non-speaking orders.

Held

The Court held that the order cancelling the petitioner's GST registration (Annexure-1) was a non-speaking order and suffered from illegality, as it provided no reasons for the cancellation. This violated 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 incorrectly believed that reasons were not necessary when an assessee failed to appear or object. The Court set aside the impugned order and directed reconsideration of the issue. Additionally, the Court noted a Central Government notification (No. 3 of 2023) allowing a further period up to June 30, 2023, for revocation of cancellation if it was for failure to file returns under Section 29(2)(b) or (c), subject to conditions like filing pending returns and making payments. The petitioner is entitled to avail this remedy if applicable.

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? 2. Whether the Assessing Officer erred in not assigning reasons for cancellation of registration, despite the format of form GST REG-19 requiring it, as contended by the petitioner? The petitioner argued that the order of cancellation of registration was non-speaking and cryptic, failing to provide any reasons, thereby violating the principles of natural justice. The petitioner relied on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. The State submitted that the Assessing Officer adopted form GST REG-19. The Court observed that form GST REG-19 has a specific column for reasons, and the Assessing Officer appeared to believe that no reasons were required if the assessee did not appear or file an objection.