Hari Om Ispat Udyog vs. State Of Punjab And Others

Held

The Court held that the cancellation order dated March 26, 2019, and the appellate order dated September 25, 2019, were liable to be quashed. The Court found it to be a conceded fact that the State Tax Officer was not the proper officer in terms of Section 29 of the PGST Act, 2017, at the time the cancellation order was passed. The Court reasoned that a subsequent authorization, especially one not issued with retrospective effect, could not cure a jurisdictional error. Furthermore, the Court determined that a jurisdictional defect could not be rectified by the First Appellate Authority by issuing a notice under Section 107(11) of the PGST Act, 2017. Therefore, the impugned orders were quashed on the ground of jurisdictional defect. The Court allowed the petition and made it clear that the Respondents were at liberty to pass a fresh order as permitted by law.

Facts

The Petitioner, Hari Om Ispat Udyog, engaged in trading iron and steel products since 1998, migrated to the Punjab Goods and Services Tax Act, 2017 (PGST Act, 2017) on July 1, 2017. The State Tax Officer (STO) issued an online notice on March 12, 2019, and subsequently, by an order dated March 26, 2019, cancelled the Petitioner's GST Registration Certificate (RC) retrospectively from July 1, 2017. The Petitioner appealed this cancellation to the Deputy Commissioner State Tax (Appeals), Ludhiana Division, who upheld the STO's order through an order dated September 25, 2019. The Petitioner then filed a writ petition before the High Court seeking to quash both orders.

Key Issues

1. Whether the order cancelling the Petitioner's GST Registration Certificate is bad in law due to lack of jurisdiction, specifically concerning the proper officer under Section 29 of the PGST Act, 2017? Petitioner's Contention: The Petitioner argued that the Excise and Taxation Officer cum State Tax Officer (STO) was not the proper officer under Section 29 of the PGST Act, 2017, at the time the cancellation order was passed, rendering the order illegal due to a jurisdictional defect. The Petitioner further contended that the First Appellate Authority could not rectify this jurisdictional error. Revenue's Contention: The State conceded that the STO was not the proper officer at the time of the cancellation order. However, it argued that a subsequent notification authorized the STO to pass such orders. Additionally, the revenue contended that the Deputy Commissioner State Tax (Appeals) had issued a notice under Section 107(11) of the PGST Act, 2017, and granted an opportunity for a personal hearing, thereby curing any defect.