Uma Shankar vs. State Of Bihar

Facts

The petitioner, Uma Shankar, proprietor of Kishan Khad Bikari Kendra, challenged an order dated 31.12.2019 passed by the Joint Commissioner of State Tax, Muzaffarpur East, Bihar, cancelling his GST registration under Section 29 of the Bihar Goods and Services Tax Act, 2017. The petitioner had been filing returns and depositing dues regularly since 2017 through his tax consultant. However, due to issues with uploading returns for certain periods, which were beyond his control, and the tax consultant's demise, the petitioner faced difficulties. Subsequently, the petitioner filed delayed returns with late fees and discharged the tax liability. He requested condonation of delay, but this was not granted, leading to the cancellation of his registration. The petitioner sought quashing of the cancellation order and restoration of his registration.

Held

The Court held that the order dated 31.12.2019 passed by the Joint Commissioner of State Tax, Muzaffarpur East, Bihar, cancelling the petitioner's GST registration was liable to be quashed. The Court found the order to be non-speaking, cryptic, and lacking reference to the show-cause notice and the petitioner's response, thus violating the principles of natural justice. The Court noted that the cancellation order entailed penal and pecuniary consequences, making it imperative for the authority to have considered the petitioner's explanation. The Court also observed that the petitioner had been a regular tax filer since 2017, had subsequently filed the delayed returns, discharged the tax liability, and made a fervent request for condonation of delay. In these peculiar facts and circumstances, the Court opined that the authority ought to have condoned the delay. The Court quashed the cancellation order and directed the restoration of the petitioner's registration. The Commissioner of State Tax was directed to finalize the petitioner's assessment or pass appropriate orders in accordance with law. The issue of delay in filing returns was deemed closed and not to be raised again.

Key Issues

1. Whether the order cancelling the petitioner's GST registration under Section 29 of the Bihar Goods and Services Tax Act, 2017, is liable to be quashed for being non-speaking and violating principles of natural justice? 2. Whether the authorities ought to have condoned the delay in filing returns, given the circumstances, and restored the petitioner's registration? Petitioner's Arguments: The petitioner argued that the cancellation order was non-speaking, cryptic, and failed to refer to the show-cause notice and his response, thereby violating principles of natural justice. He contended that the delay in filing returns was due to circumstances beyond his control, including the demise of his tax consultant, and that he had subsequently filed the delayed returns, paid the tax liability, and requested condonation of delay. The petitioner relied on the fact that he had been a regular tax filer since 2017. Revenue's Arguments: The revenue did not dispute the facts presented by the petitioner regarding the filing of delayed returns and discharge of tax liability. Learned SC 11 for the respondents stated that the issue of delay in filing returns shall remain closed and not be raised again.