M/S Jay Baba Sidhnath Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s Jay Baba Sidhnath Enterprises, is challenging an order dated July 30, 2021, which cancelled its GST registration. An appeal filed against this order was rejected due to delay. The petitioner argues that the cancellation order is non-speaking, meaning it lacks reasons. The State submitted that the Assessing Officer used Form GST REG-19. The Court noted that Form GST REG-19 has a specific column for reasons, which was not filled. The Court also referenced a previous judgment in Manoj Kumar Sah v. The State of Bihar and Anr. concerning a similar non-speaking order.

Held

The Court held that the order cancelling the petitioner's GST registration (Annexure-3 dated July 30, 2021) is a non-speaking order and suffers from illegality. The Court found that the order provided no reasons for the cancellation and did not even refer to the subject of the notice. This violates the principles of natural justice, as highlighted in the case of Manoj Kumar Sah v. The State of Bihar and Anr., where a similar non-speaking and cryptic order was quashed. The Court noted that Form GST REG-19, used by the Assessing Officer, has a specific column for reasons, which was not utilized. 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 provides an extended period for registered persons to apply for revocation of cancellation under specific conditions related to failure to file returns, allowing them to avail this remedy if applicable.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, Annexure-3 dated July 30, 2021, 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 when using Form GST REG-19, despite the form having a dedicated column for reasons, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the cancellation order is non-speaking and lacks any reasons for the cancellation of registration. This violates the principles of natural justice, especially since such an order has civil and penal consequences. The petitioner relied on the judgment in Manoj Kumar Sah v. The State of Bihar and Anr. to support the contention that a non-speaking and cryptic order is illegal. Revenue's Arguments: The State submitted that the Assessing Officer adopted Form GST REG-19. The judgment does not record any further arguments from the State regarding the validity of the order or the absence of reasons.