M/S Gramin Vikas Ewam Samaj Kalyan Samiti vs. The State Of Bihar

Held

The Court held that the order dated 08.08.2021 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 by failing to provide a proper opportunity for the petitioner to file a reply and be heard. The Court noted that the order did not refer to the contents of any show cause notice or the response thereto, making the reason for cancellation undecipherable. The Court reasoned that such an order, entailing civil and penal consequences, must adhere to due process. Consequently, the Court quashed the order of cancellation 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 Court also noted the undertaking by the revenue that the issue of delay in filing returns would not be raised again.

Facts

The petitioner, M/s Gramin Vikas Ewam Samaj Kalyan Samiti Sahpur, filed a writ petition challenging an order dated 04.08.2022 by the Additional Commissioner, State Tax (Appeals), Patna West Division, which rejected their application for revocation of cancellation of registration. The petitioner also sought to quash an ex-parte order dated 08.08.2021 by the Joint Commissioner of State Tax, Shahabad Circle, Bhojpur, which cancelled their GST registration without proper opportunity for reply or hearing. The cancellation order, though stating a reply dated 30/07/2021 was received, also noted no reply was submitted and the petitioner did not appear for hearing. The order determined zero tax, interest, penalty, or other amounts payable. The petitioner contended that the cancellation order was non-speaking and violated principles of natural justice. They also sought restoration of their registration, de-freezing of their bank account, and a direction to restrain coercive recovery actions.

Key Issues

1. Whether the order dated 08.08.2021 passed by the Joint Commissioner of State Tax, Shahabad Circle, Bhojpur, cancelling the petitioner's GST registration, is liable to be quashed for violating principles of natural justice, specifically for being passed ex-parte without affording a proper opportunity of hearing and filing a reply, as contemplated under Section 29 of the Bihar Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that the cancellation order was non-speaking, cryptic, and passed without a proper show cause notice and hearing, thus violating the principles of natural justice. They contended that the authority ought to have considered their request for condonation of delay in filing returns, especially given the circumstances post-Covid-19 pandemic. Revenue's Arguments: The judgment records that learned Standing Counsel for the respondents stated that the issue of delay in filing returns would remain closed and not be raised again. No other specific arguments from the revenue were explicitly detailed in the judgment regarding the validity of the cancellation order itself.