M/S Bijay Kumar Bhagat vs. The State Of Bihar

Facts

The petitioner, M/s Bijay Kumar Bhagat, a sole proprietorship, filed a writ petition challenging the order dated April 5, 2022, passed by the Joint Commissioner of State Tax, Purnea. This order cancelled the petitioner's GST registration under Section 29 of the Bihar Goods and Services Tax Act, 2017. The cancellation order, which was issued in response to a show cause notice dated March 26, 2022, stated that no reply was submitted. The order also indicated that the total tax, interest, and penalty payable were zero. The petitioner argued that they had been regularly filing returns and depositing dues since 2018, and any delay in uploading returns for certain periods was due to the Covid-19 pandemic, which was beyond their control.

Held

The Court held that the order cancelling the petitioner's GST registration was non-speaking, cryptic, and failed to refer to the petitioner's reply to the show cause notice, thus violating the principles of natural justice. The Court noted that the cancellation order had penal and pecuniary consequences for the petitioner. The Court found that the petitioner had been diligently filing returns and depositing dues since 2018, and the delay in uploading returns was attributable to the Covid-19 pandemic, a factor beyond their control. Consequently, the Court quashed the cancellation order dated April 5, 2022, and restored the petitioner's registration. The Court further directed the Commissioner, BGST, to finalize the petitioner's assessment or pass appropriate orders in accordance with the law. The Court also reiterated that the issue of delay in filing returns would remain closed and would not be raised again by the respondents.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is vitiated by a violation of the principles of natural justice, particularly the requirement for a speaking order? (Section 29 of the Bihar Goods and Services Tax Act, 2017). The petitioner contended that the cancellation order was non-speaking, cryptic, and failed to refer to their reply to the show cause notice, thereby violating principles of natural justice. The petitioner also argued that the cancellation order entails penal and pecuniary consequences. The respondents (State of Bihar and its tax authorities) did not record any specific arguments in the judgment regarding this issue.