M/S Janseva Traders vs. The State Of Bihar

Facts

The petitioner, M/s Janseva Traders, is challenging an order dated April 11, 2022, which cancelled 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 by way of a writ petition. The petitioner contended that the cancellation order was non-speaking and lacked 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 assigning reasons, which was not utilized. The absence of reasons in the cancellation order was highlighted as a significant flaw.

Held

The Court held that the order cancelling the petitioner's GST registration was a non-speaking order and suffered from illegality. The Court found that the order at Annexure-2 series did not state any reasons for the cancellation and did not even refer to the subject of the notice. This violated the principles of natural justice, as established in the cited case of Manoj Kumar Sah. The Court noted that Form GST REG-19, which was used, has a specific column for assigning reasons, but this was not done. The Assessing Officer's belief that no reasons were needed in the absence of an appearance or objection was found to be incorrect. Consequently, the Court set aside the impugned order and directed the respondents to reconsider the issue. The Court also took note of Notification No. 3 of 2023, which provides a window for registered persons to apply for revocation of cancellation under certain conditions, particularly for failures under Section 29(2)(b) or (c), if returns are filed and dues are paid.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is a non-speaking order and violates the principles of natural justice, thereby being liable to be quashed, particularly in light of Section 29(2) of the Bihar Goods and Services Tax Act, 2017 and Rule 21 of the Bihar Goods and Services Tax Rules, 2017? Petitioner's Arguments: The petitioner argued that the cancellation order was non-speaking, meaning it did not provide any reasons for the cancellation. This failure to provide reasons violates the principles of natural justice and renders the order illegal. 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 non-speaking and cryptic orders leading to civil and penal consequences are liable to be quashed. Respondent's Arguments: The State contended that the Assessing Officer adopted Form GST REG-19. The Court noted the State's submission that the Assessing Officer believed no reasons were required if the assessee did not appear or file an objection.