M/S Acme, Having Its Office At Magadh Colony vs. The State Of Bihar

Facts

The petitioner, M/s ACME, is challenging an order dated January 4, 2020, which cancelled its GST registration. The petitioner argues that the order is non-speaking and lacks reasons. The State contends that the Assessing Officer adopted the form GST REG-19. The Court notes that GST REG-19 has a specific column for reasons, which was not filled. The Court also refers to a previous judgment in Manoj Kumar Sah versus The State of Bihar and Anr., which highlighted similar illegality in non-speaking orders leading to civil and penal consequences. The Court observes that the impugned order suffers from the same defect.

Held

The Court held that the order cancelling the petitioner's GST registration (Annexure-2) is a non-speaking order and suffers from illegality. The Court found that the order lacked any stated 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 versus The State of Bihar and Anr. The Court reasoned that form GST REG-19, despite being adopted, has a specific column for assigning reasons, which was not utilized. The Assessing Officer's apparent belief that no reasons need to be assigned when an assessee does not appear or file an objection was found to be incorrect. The Court set aside the impugned order and directed reconsideration of the issue. Additionally, the Court noted a notification allowing a further period up to June 30, 2023, for registered persons to apply for revocation of cancellation if it was effected for failure to file returns under Section 29(2)(b) or (c), subject to conditions like filing returns and making payments.

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 was justified in not assigning reasons for cancellation when adopting form GST REG-19, as suggested by the State's submission? Petitioner's Contention: The petitioner argues that the order of cancellation of registration is non-speaking, meaning it does not provide any reasons for the decision. This violates the principles of natural justice, especially since such an order can lead to civil and penal consequences. They rely on the reasoning in Manoj Kumar Sah versus The State of Bihar and Anr. to support their claim that a non-speaking order is illegal. Respondent's Contention: The State submits that the Assessing Officer adopted the form GST REG-19. The judgment does not record any further arguments from the State regarding the necessity or justification of providing reasons in the order.