M/S Prince Raj vs. The Union Of INDIA

Facts

The petitioner, M/s Prince Raj, is challenging an order dated 18.10.2021 that cancelled its GST registration. The petitioner filed an appeal against this cancellation, but the appeal was rejected due to delay. The petitioner then filed a writ petition before the High Court, arguing that the order of cancellation was non-speaking. The State submitted that the Assessing Officer used 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 observed that there is currently no GST Tribunal constituted in Bihar. The petitioner's registration was cancelled by the Assistant Commissioner of State Tax, Purnea Circle, Purnea.

Held

The Court held that the order of cancellation of registration at Annexure-1 is a non-speaking order, suffering from the same illegality pointed out in the case of Manoj Kumar Sah. The order lacks any stated reasons for the cancellation and does not even refer to the subject of the notice, thereby violating the principles of natural justice. The Court found that the Assessing Officer appeared to be under the mistaken belief that no reasons need to be assigned when an assessee does not appear or file an objection. The Court explicitly stated that it cannot countenance such an order. Consequently, the Court set aside the impugned order and directed reconsideration of the issue. The Court also took note of Notification No. 3 of 2023, which provides a further period up to 30.06.2023 for registered persons to apply for revocation of cancellation if the cancellation was for failure to file returns under clauses (b) or (c) of Sub-section (2) of Section 29, subject to conditions like filing returns and making payments. The writ petition was allowed.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, passed by the Assistant Commissioner of State Tax, 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 of registration when using form GST REG-19, despite the form having a specific column for reasons, as contended by the petitioner? Petitioner's arguments: The petitioner argued that the order of cancellation of registration (Annexure-1) is non-speaking, lacking any reasons for the cancellation and not even referring to the subject of the notice. This violates the principles of natural justice. 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 a non-speaking and cryptic order violating natural justice principles needs to be quashed. Respondent's arguments: The State submitted that the Assessing Officer adopted the form GST REG-19. The Court noted that the State did not otherwise contest the petitioner's assertion that the order was non-speaking or argue that reasons were provided.