M/S Kala Coke And Chemicals PVT. LTD. vs. The State Of Bihar

Held

The Court held that the order dated 27.07.2021 passed by the Joint Commissioner of State Tax, Shahabad Circle, Bhojpur, 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 was passed without adequately referring to the show cause notice and the Petitioner's response thereto. The Court noted that the Petitioner had made a fervent request for condonation of delay in accepting the return, which was unfortunately not done. Consequently, the Petitioner's registration was restored. The Court directed the Commissioner, Department of State Taxes, Government of Bihar, Patna, to finalize the Petitioner's assessment and/or pass appropriate orders in accordance with law. The Court also noted that the issue of delay in filing the returns would remain closed and not be raised again, as stated by the Revenue's counsel. The writ petition was allowed in these terms.

Facts

The Petitioner, M/s Kala Coke and Chemicals Pvt. Ltd., filed a writ petition challenging an order dated 09.11.2022 by the Additional Commissioner of 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 27.07.2021 passed by the Joint Commissioner of State Tax, Shahabad Circle, Bhojpur, which cancelled their GST registration without proper consideration of their contentions. The Petitioner requested restoration of their registration, de-freezing of their bank account, and a stay on recovery actions. The cancellation order dated 27.07.2021 was passed under Section 29 of the Bihar Goods and Services Tax Act, 2017, stating no reply to the show cause notice was submitted and the petitioner did not appear on the hearing date, despite the petitioner claiming to have made a fervent request for condonation of delay in accepting returns.

Key Issues

1. Whether the order dated 27.07.2021, cancelling the Petitioner's GST registration, is liable to be quashed for violating principles of natural justice, as argued by the Petitioner? The Petitioner contended that the order was ex-parte, non-speaking, cryptic, and passed without due consideration of their contentions or a proper response to the show cause notice, thus violating natural justice. The Revenue did not record any specific argument against this contention in the judgment. 2. Whether the Petitioner is entitled to the restoration of their GST registration and other consequential reliefs, including de-freezing of their bank account and a stay on recovery proceedings, as prayed for? The Petitioner argued that the cancellation was based on a flawed ex-parte order and that the authorities ought to have condoned the delay in filing returns, especially in the peculiar circumstances post-Covid-19 pandemic. The Revenue, represented by learned Standing Counsel-11, stated that the issue of delay in filing returns would remain closed and not be raised again.