Amit Kumar vs. The State Of Bihar

Facts

The petitioner, Amit Kumar, proprietor of M/s Mahakal Stone Cresar Office, is challenging the cancellation of his GST registration by an order dated July 27, 2022, passed by the Joint Commissioner, State Tax, Patna South Circle. The petitioner filed an appeal against this order, but it was rejected due to delay. The petitioner contends that the order of cancellation is non-speaking. The State submitted that the Assessing Officer adopted the form GST REG-19. The Court noted that Form GST REG-19, as per the Bihar Goods and Services Taxes Rules, 2017, has a specific column for assigning reasons, which was not utilized. The absence of any reasons for cancellation was highlighted as a significant flaw.

Held

The Court held that the order cancelling the petitioner's GST registration (Annexure-1) is a non-speaking order, as it fails to provide any reasons for the cancellation. This violates the principles of natural justice, as highlighted by the Court and supported by a previous Division Bench judgment. The Court found that the Assessing Officer did not assign any reasons in the order, despite Form GST REG-19 having a specific column for this purpose. The Court cannot countenance such an order. Consequently, the impugned order at Annexure-1 is set aside. The Court directed reconsideration of the issue. Additionally, the Court noted Notification No. 3 of 2023, which provides a period up to June 30, 2023, for registered persons to apply for invocation of cancellation if it was effected for failure to file returns under Section 29(2)(b) or (c) of the Bihar Goods and Services Tax Act, subject to conditions like filing returns and making payments. The writ petition is allowed.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is a non-speaking order, violating principles of natural justice, and thus liable to be quashed, as argued by the petitioner? The petitioner contended that the order at Annexure-1 is non-speaking, lacking any reasons for the cancellation of registration, thereby violating principles of natural justice. The State argued that the Assessing Officer adopted Form GST REG-19. The Court also considered a previous judgment by a Division Bench in Manoj Kumar Sah versus The State of Bihar and Anr. which held that a non-speaking and cryptic order violating natural justice principles warrants quashing when it entails penal and pecuniary consequences. The Court also noted a Central Government notification allowing invocation of cancellation under certain conditions related to failure to file returns under Section 29(2)(b) or (c).