M/S Al- Tayyebaat Foods PVT. LTD. vs. The State Of Bihar

Held

The Court held that the order dated 28.08.2021 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 by failing to provide the petitioner with an adequate opportunity to file a reply and be heard. The Court noted that the cancellation order did not refer to the contents of the show cause notice or any response thereto. Consequently, the Court quashed the order of cancellation and directed the restoration of the petitioner's GST 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 the law. The Court also noted that the issue of delay in filing returns would not be raised again by the respondents.

Facts

The petitioner, M/s Al-Tayyebaat Foods Pvt. Ltd., filed a writ petition challenging an order dated 22.11.2022 by the Additional Commissioner of State Tax (Appeals), Patna, which rejected their application for revocation of a cancellation order. The petitioner also challenged an ex-parte order dated 28.08.2021 by the Joint Commissioner of State Tax, Danapur Circle, Patna, which cancelled their GST registration without providing an opportunity to file a reply or be heard. The petitioner sought restoration of their registration, de-freezing of their bank account, and a stay on coercive recovery actions. The cancellation order dated 28.08.2021 was issued under Section 29 of the Bihar Goods and Services Tax Act, 2017, and stated that no reply was submitted to a show cause notice dated 10.08.2021, and the petitioner did not appear on the hearing date. However, the order itself was cryptic and non-speaking, with no mention of the show cause notice contents or any response.

Key Issues

1. Whether the order dated 28.08.2021 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, specifically for not providing an adequate 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 contended that the cancellation order was ex-parte, passed without proper opportunity to file a reply and be heard, thus violating principles of natural justice. They argued that the order was cryptic, non-speaking, and the reasons for cancellation were not decipherable. They also highlighted that the authority ought to have condoned the delay in filing returns, especially given the circumstances post-Covid-19 pandemic, and that their application for revocation of cancellation was wrongly rejected. Revenue's Arguments: The revenue, represented by GP 7, stated that the issue of delay in filing returns would not be raised again, implying an acceptance of the petitioner's plea regarding the delay.