M/S Shibu Construction Private Limited vs. The State Of Bihar

Held

The Court held that the order dated 10.09.2020 passed by the Joint Commissioner of State Tax, Danapur Circle, Patna, cancelling the petitioner's GST registration, was liable to be quashed. The Court found that the order was non-speaking, cryptic, and violated the principles of natural justice as it did not refer to the show cause notice or the petitioner's response thereto. The Court noted that the order entailed civil and penal consequences, and the authority ought to have at least referred to the contents of the show cause and the response. The Court also observed that the petitioner had made a fervent request for condonation of delay in accepting the return, which was unfortunately not done. Consequently, the Court quashed the order dated 10.09.2020 and directed the restoration of the petitioner's registration. The Court further directed the Commissioner, Department of State Taxes, Government of Bihar, Patna, to finalize the petitioner's assessment or pass appropriate orders in accordance with law. The issue of delay in filing returns was expressly stated to remain closed and not be raised again, as assured by the revenue's counsel.

Facts

M/s Shibu Construction Private Limited (the petitioner) filed a writ petition challenging an order dated 24.11.2022 by the Additional Commissioner, State Tax (Appeals), Patna, which dismissed their appeal for revocation of GST registration cancellation. The petitioner also sought to quash an ex-parte order dated 10.09.2020 by the Joint Commissioner of State Tax, Danapur Circle, Patna, which cancelled their GST registration. The cancellation order was issued without due consideration of the petitioner's contentions. The petitioner requested restoration of their registration, de-freezing of their bank account, and a restraint on coercive recovery actions. The cancellation order dated 10.09.2020 stated that no reply to the notice to show cause was submitted and the petitioner did not appear on the hearing date, despite the petitioner's reply dated 20.08.2020 being referenced in the order.

Key Issues

1. Whether the order dated 10.09.2020 passed by the Joint Commissioner of State Tax, Danapur Circle, Patna, cancelling the petitioner's GST registration, is liable to be quashed for violating principles of natural justice, particularly Section 29 of the Bihar Goods and Services Tax Act, 2017? 2. Whether the petitioner's appeal before the Additional Commissioner, State Tax (Appeals), Patna West Division, was rightly dismissed? Petitioner's arguments: The petitioner contended that the cancellation order dated 10.09.2020 was ex-parte, non-speaking, and cryptic, violating principles of natural justice. They argued that the authority failed to consider their contentions and the peculiar circumstances, including the impact of the Covid-19 pandemic, and that their request for condonation of delay in accepting their return was not considered. They relied on the fact that they had applied for registration which was initially accepted. Revenue's arguments: The revenue, represented by Mr. Vikash Kumar (SC 11), did not explicitly argue against the petitioner's claims regarding the cancellation order's procedural infirmities. However, it was stated by the learned Standing Counsel that the issue of delay in filing returns shall remain closed and not be raised again.