M/S Pradhan Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s Pradhan Enterprises, a proprietorship firm, is challenging the cancellation of its GST registration by an order dated September 11, 2020 (Annexure-3). The petitioner filed an appeal against this order, which was rejected due to delay. The petitioner argues that the order of cancellation is non-speaking. The State contended 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 referred to a previous judgment of a Division Bench in Manoj Kumar Sah versus The State of Bihar and Anr. regarding non-speaking orders.

Held

The Court held that the order cancelling the petitioner's GST registration (Annexure-3) is a non-speaking order, as it fails to provide any reasons for the cancellation. This violates the principles of natural justice. The Court relied on a previous judgment of a Division Bench in Manoj Kumar Sah versus The State of Bihar and Anr., which stated that such cryptic and non-speaking orders, which do not refer to the show cause notice or the response thereto, are illegal and need to be quashed. The Court observed 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, especially when the form GST REG-19 has a specific column for reasons. The Court set aside the impugned order and directed reconsideration of the issue. Additionally, the Court noted Notification No. 3 of 2023, which provides 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.

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? The petitioner argued that the order at Annexure-3 is non-speaking, lacking any reasons for the cancellation of registration. The petitioner contended that this violates the principles of natural justice, as established in previous judgments. The petitioner also highlighted that the form GST REG-19, which was used, has a specific column for reasons that was left blank. The respondent State argued that the Assessing Officer adopted the form GST REG-19. The State's counsel did not present further arguments on the non-speaking nature of the order or the violation of natural justice.