M/S Kamlakshi Travels vs. The State Of Bihar

Held

The Court held that the ex-parte order dated 12.02.2021 passed by the Joint Commissioner of State Tax, Patna South Circle, Patna, cancelling the petitioner's GST registration, was indeed passed in violation of the principles of natural justice. The Court found the order to be non-speaking and cryptic, failing to refer to the show cause notice and the petitioner's response thereto. The Court emphasized that the order entailed penal and pecuniary consequences, necessitating adherence to due process. The Court noted that the cancellation order referenced a reply dated 07.02.2021 to a show cause notice dated 29.01.2021, but then contradicted itself by stating no reply was submitted and the petitioner did not appear for hearing. The Court quashed the order dated 12.02.2021, directing the restoration of the petitioner's registration. Furthermore, the Court 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 Court also noted the undertaking by the revenue that the issue of delay in filing returns would not be raised again. The appellate order rejecting the revocation application was implicitly set aside by quashing the original cancellation order.

Facts

The petitioner, M/s Kamlakshi Travels, challenged an order dated 24.11.2022 by the Additional Commissioner of State Tax (Appeals), Patna West Division, which rejected their application for revocation of cancellation of GST registration. The petitioner's GST registration was cancelled ex-parte on 12.02.2021 by the Joint Commissioner of State Tax, Patna South Circle, Patna. The petitioner contended that this cancellation order was passed without proper opportunity to file a reply or be heard. The cancellation order itself referenced a reply dated 07.02.2021 to a show cause notice dated 29.01.2021, but then stated no reply was submitted and the petitioner did not appear for hearing. The petitioner sought quashing of both the cancellation order and the appellate order, restoration of registration, de-freezing of bank accounts, and a stay on coercive recovery actions.

Key Issues

1. Whether the ex-parte order dated 12.02.2021 passed by the Joint Commissioner of State Tax, Patna South Circle, Patna, cancelling the petitioner's GST registration, was passed in violation of the principles of natural justice, specifically the right to a proper opportunity of hearing and filing a reply, thereby contravening Section 29 of the Bihar Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the cancellation order was passed without affording them a proper opportunity to file a reply and be heard. They claimed the order was non-speaking, cryptic, and the reasons for cancellation were not decipherable, leading to a violation of natural justice principles. They also highlighted that the order was passed ex-parte and that the authority failed to condone the delay in filing returns, despite a fervent request, in the peculiar circumstances post-Covid-19 pandemic. Revenue's Contention: The revenue, represented by GP 7, did not record any specific arguments against the petitioner's claims regarding the procedural irregularities. However, they agreed that the issue of delay in filing returns would not be raised again.