M/S Champion Group Of Company vs. The State Of Bihar

Held

The Court held that the order dated 07.09.2021 passed by the Joint Commissioner of State Tax, Patna Central Circle, cancelling the petitioner's GST registration, was liable to be quashed. The Court found that the order was non-speaking, cryptic, and passed without affording the petitioner a proper opportunity to file a reply and be heard, thus violating the principles of natural justice. The Court noted that the cancellation order entailed civil and penal consequences, and the authority failed to refer to the show cause notice or the petitioner's response. The Court also acknowledged the petitioner's request for condonation of delay due to the Covid-19 pandemic. Consequently, the Court quashed the cancellation order and directed the restoration of the petitioner's registration. The Court further directed the Commissioner, Department of State Taxes, Government of Bihar, to finalize the petitioner's assessment or pass appropriate orders in accordance with the law. The issue of delay in filing returns was expressly stated to remain closed and not be raised again by the respondents.

Facts

The petitioner, M/s Champion Group of Company, filed a writ petition challenging an order dated 26.11.2022 by the Additional Commissioner of State Tax (Appeals), Patna, which rejected their application for revocation of cancellation of GST registration. The petitioner also sought to quash an ex-parte order dated 07.09.2021 passed by the Joint Commissioner of State Tax, Patna Central Circle, cancelling their GST registration. The cancellation order was issued without giving the petitioner a proper opportunity to file a reply or be heard. The petitioner's registration was cancelled under Section 29 of the Bihar Goods and Services Tax Act, 2017. The petitioner had applied for registration, which was granted, but due to the Covid-19 pandemic, they faced delays in their work and subsequently in filing returns. The petitioner requested condonation of delay, which was not granted.

Key Issues

1. Whether the order dated 07.09.2021 passed by the Joint Commissioner of State Tax, Patna Central Circle, cancelling the petitioner's GST registration, is liable to be quashed for violation of principles of natural justice, specifically for lack of proper opportunity to file a reply and be heard, as contemplated under Section 29 of the Bihar Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that the cancellation order was ex-parte, non-speaking, and cryptic, failing to refer to any show-cause notice or response thereto. This violated the principles of natural justice, leading to civil and penal consequences. They contended that the authority ought to have considered their request for condonation of delay in filing returns, especially given the circumstances of the Covid-19 pandemic. Revenue's Arguments: The revenue, represented by Mr. Vikash Kumar (SC 11), did not present any arguments against the petitioner's claims regarding the procedural irregularities and violation of natural justice. The judgment notes that the learned Standing Counsel for the respondents stated that the issue of delay in filing returns would remain closed and not be raised again.