Jascon Enterbuild Limited vs. State Of Bihar

Facts

The petitioner, Jascon Enterbuild Limited, is challenging an order dated September 13, 2019, which cancelled its GST registration. The petitioner argues that the order is non-speaking and lacks any reasons for the cancellation. The State's counsel submitted that the Assessing Officer adopted the form GST REG-19. The Court observed that while GST REG-19 has a specific column for reasons, the Assessing Officer appeared to believe no reasons were necessary if the assessee did not appear or file an objection. The Court noted that the impugned order suffers from the same illegality as pointed out in a previous judgment by another Division Bench of the High Court.

Held

The Court held that the impugned order cancelling the petitioner's GST registration is a non-speaking order, lacking any reasons for the cancellation. This violates the principles of natural justice, as established in the case of Manoj Kumar Sah versus The State of Bihar and Anr., where a similar non-speaking and cryptic order was quashed. The Court found that the Assessing Officer incorrectly believed that reasons need not be assigned when an assessee fails to appear or file an objection. The ratio decidendi is that an order cancelling GST registration, which carries civil and penal consequences, must be reasoned and cannot be cryptic. Consequently, the Court set aside the order of cancellation (Annexure-3) and directed the issue to be reconsidered. The Court also noted Notification No. 3 of 2023, which provides a period for revival of cancelled registrations for failure to file returns under Section 29(2)(b) or (c), subject to certain 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 of the Bihar Goods and Services Tax Act, 2017 and Rule 21 of the Bihar Goods and Services Tax Rules, 2017? The petitioner contended that the order of cancellation of registration is cryptic and non-speaking, failing to provide any reasons, thereby violating the principles of natural justice. The petitioner relied on the judgment in Manoj Kumar Sah versus The State of Bihar and Anr. to support its claim that such an order, entailing civil and penal consequences, must at least refer to the show cause notice and the response thereto. The respondent/State argued that the Assessing Officer adopted the form GST REG-19. However, the judgment does not record any further arguments from the State regarding the validity of the non-speaking order.