M/S Sunil Kumar Singh Through Shri Sunil Singh vs. State Of U.P. Thru. Prin. Secy., Tax And Registration, Lucknow And Others

Held

The Court held that the order dated August 21, 2023, cancelling the petitioner's GST registration, is quashed. The reasoning is that the order was passed without assigning any reasons, which is contrary to various judgments of this Court and the principle that reasons are the heart and soul of any judicial and administrative order. Such an order cannot be justified in the eye of law. The Court also found that since the appeal was dismissed on the ground of delay, the doctrine of merger would not apply. Citing its own decisions in *M/s Chandra Sain* and *Om Prakash Mishra*, the Court emphasized that orders impacting fundamental rights like the right to do business must be passed with application of mind and with reasons, satisfying the test of Article 14 of the Constitution. The Court directed the petitioner to file a reply to the show cause notice within three weeks, after which the Adjudicating Authority shall pass a fresh order after providing an opportunity of hearing and considering the petitioner's defense. The appeal order is consequently set aside.

Facts

The petitioner, M/s Sunil Kumar Singh, assails an order dated August 21, 2023, by the Assistant Commissioner, Sector 5, State Tax, Ayodhya, cancelling its GST registration. The petitioner also challenges an order dated May 29, 2024, by respondent no. 3, which dismissed its appeal as barred by limitation under Section 107(4) of the UPGST Act. The petitioner argues that the cancellation order was passed mechanically without application of mind and without assigning reasons, violating Article 14 of the Constitution. It also contends that the appeal was dismissed without considering the detailed reasons provided for the delay. The revenue supports the impugned orders, stating cancellation was due to non-filing of returns and tax, and the appeal was rightly rejected as time-barred.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, dated August 21, 2023, passed by the Assistant Commissioner, is valid in law, considering it allegedly lacks reasons and application of mind, thereby violating Article 14 of the Constitution of India, as argued by the petitioner? 2. Whether the dismissal of the petitioner's appeal by respondent no. 3 on May 29, 2024, on the grounds of limitation under Section 107(4) of the UPGST Act, was justified, given the petitioner's submission that detailed reasons for the delay were provided but not considered? Petitioner's arguments: The cancellation order was passed mechanically without application of mind and reasons, violating Article 19 and Article 14 of the Constitution, relying on judgments in *Om Prakash Mishra* and *M/s Chandra Sain*. The appeal dismissal on limitation was erroneous as reasons for delay were not considered. The order is against the intent of the Act and Supreme Court's decision in *Whirlpool Corporation*. Respondent's arguments: The cancellation was initiated due to non-filing of returns and tax. The appeal was correctly rejected as it was filed beyond the period of limitation prescribed under Section 107(4) of the Act.