M/S Best Bricks, (A Sole Proprietorship Firm) vs. The Union Of INDIA

Held

The Court held that the order dated December 19, 2019, passed by the Joint Commissioner of State Tax, cancelling the petitioner's registration, was non-speaking, cryptic, and violative of the principles of natural justice as it was passed without providing an opportunity of hearing. The Court noted that the authority ought to have referred to the show-cause notice and the response thereto, which was not done. Consequently, the Court quashed the order dated December 19, 2019. The Court also restored the petitioner's GST registration and directed the concerned authority to finalize the petitioner's assessment or pass appropriate orders in accordance with the law. The Court reiterated that the issue of delay in filing returns would remain closed and not be raised again, as assured by the learned GP-7 for the respondents. The Court found the appellate order dated September 19, 2022, unsustainable as it upheld a flawed cancellation order.

Facts

The petitioner, M/s Best Bricks, a sole proprietorship, challenged an order dated September 19, 2022, passed by the Additional Commissioner (Appeal), Purnea Division, which dismissed their appeal on grounds of limitation and non-filing of a certified copy of the impugned order. This appellate order upheld the cancellation of the petitioner's GST registration by the Joint Commissioner of State Tax, Purnea, via an ex-parte order dated December 19, 2019. The petitioner contended that the cancellation order was passed without providing an opportunity of hearing and that there were no pending tax dues. The petitioner further stated that they had been filing returns regularly since 2017, but due to the Covid-19 pandemic, returns for certain periods were not uploaded, a situation beyond their control. The petitioner sought quashing of the cancellation order, restoration of their GST registration, and permission to furnish pending returns within fifteen days.

Key Issues

1. Whether the order dated September 19, 2022, passed by the Additional Commissioner (Appeal) dismissing the petitioner's appeal on grounds of limitation and non-filing of a certified copy is sustainable in law, considering the circumstances leading to the cancellation of registration? 2. Whether the ex-parte order dated December 19, 2019, passed by the Joint Commissioner of State Tax, cancelling the petitioner's GST registration, is vitiated by a violation of the principles of natural justice, specifically the lack of an opportunity of hearing? Petitioner's arguments: The petitioner argued that the cancellation order was ex-parte and passed without providing an opportunity of hearing, violating principles of natural justice. They also contended that the appellate authority wrongly dismissed their appeal on grounds of limitation and non-filing of a certified copy, especially when the underlying cancellation order itself was flawed. The petitioner highlighted that they had been compliant since 2017 and that the non-uploading of returns was due to the Covid-19 pandemic, a force majeure event. They expressed readiness to furnish pending returns. Revenue's arguments: The judgment does not record specific arguments made by the revenue or State respondents.