M/S Om Sai Enterprises (A Sole Proprietorship Firm) vs. The Union Of INDIA

Facts

The petitioner, M/s Om Sai Enterprises, is challenging the cancellation of its GST registration, as per an order dated 26.07.2022 (Annexure-2). The petitioner filed an appeal against this cancellation, but it was rejected due to delay. The petitioner then approached the High Court by way of a writ petition. The petitioner argued that the order of cancellation was non-speaking. The respondents, represented by 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 in the impugned order.

Held

The Court held that the order of cancellation of GST registration (Annexure-2) was a non-speaking order, lacking any reasons for the cancellation and not even referring 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 the impugned order suffered from the same illegality. Consequently, the Court set aside the order at Annexure-2 and directed reconsideration of the issue. The Court also noted Notification No. 3 of 2023, which allows registered persons to apply for invocation of cancellation under specific conditions if cancellation was effected for failure to file returns under Section 29(2)(b) or (c), provided returns are filed and taxes/penalties are paid.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is a non-speaking order, violating principles of natural justice, as per 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 contended that the order of cancellation of registration was non-speaking, meaning it did not provide any reasons for the cancellation. This failure to provide reasons violates the principles of natural justice. The petitioner relied on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. Revenue's Arguments: The State submitted that the Assessing Officer adopted the form GST REG-19. The Court noted the State's submission but also observed that the form itself requires reasons to be assigned, and the Assessing Officer seemed to believe no reasons were necessary if the assessee did not appear or file an objection.