M/S Shyam Kumar vs. The State Of Bihar

Facts

The petitioner, M/s Shyam Kumar, is challenging the cancellation of its GST registration, an order dated 03.01.2022 (Annexure-1), passed by the Joint Commissioner, State Tax, Patna City West Circle. The petitioner's subsequent appeal against this order was rejected, partly due to delay. The petitioner contends that the cancellation order is non-speaking and lacks reasons. The State submitted 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. The Court also referenced a previous judgment of a Division Bench in Manoj Kumar Sah versus The State of Bihar and Anr. concerning a similar non-speaking order.

Held

The Court held that the order of cancellation of registration at Annexure-1 is a non-speaking order, lacking any reasons for the cancellation. This violates the principles of natural justice, as established in the cited judgment of Manoj Kumar Sah v. The State of Bihar and Anr. The Court found that the Assessing Officer appeared to believe that no reasons need to be assigned if the assessee does not appear or file an objection, which is incorrect. The Court also noted that Form GST REG-19 has a specific column for assigning reasons, which was not utilized. Consequently, the Court set aside the impugned order at Annexure-1 and directed reconsideration of the issue. The Court also acknowledged Notification No. 3 of 2023, which provides a period for revocation of cancellation for failure to file returns under Section 29(2)(b) or (c), 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, issued in Form GST REG-19, 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 the cancellation of registration, despite the format of Form GST REG-19 requiring it, as contended by the petitioner? 3. Whether the petitioner is entitled to the remedy provided under Notification No. 3 of 2023, allowing for revocation of cancellation under certain conditions, as argued by the petitioner? Petitioner's Arguments: The petitioner argued that the cancellation order is non-speaking and lacks reasons, violating principles of natural justice. They relied on the judgment in Manoj Kumar Sah v. The State of Bihar and Anr. to support their claim that the order is cryptic and the reasons for cancellation are not decipherable. 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 non-speaking nature of the order or the violation of natural justice.