M/S Royal Pollution Control Services, Lko. Thru. Its Proprietor- Mohammad Ziayrrahman Khan vs. Union Of INDIA, Thru. Secy. Ministry Of Finance, New- Delhi, And 5 Others
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The petitioner, M/s Royal Pollution Control Services, Lko., challenged an order dated 12.05.2022 by respondent no. 6, which cancelled its GST registration. The petitioner also challenged an appellate order dated 21.01.2023, which rejected its appeal against the cancellation on grounds of delay. The petitioner is a sole proprietorship engaged in civil contractual work. A show cause notice dated 02.03.2022 was issued for non-filing of GST returns. The petitioner claims it did not receive the show cause notice and thus could not file a reply within the stipulated seven working days, leading to the cancellation order. The petitioner argued the cancellation order was contradictory, stating both that a reply was submitted and that it was not.
Held
The Court allowed the writ petition, setting aside both the order dated 12.05.2022 cancelling the petitioner's GST registration and the appellate order dated 21.01.2023 rejecting the appeal. The Court relied on its previous judgment in Writ Tax No. 145 of 2022 (Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others), dated 26.09.2022. It held that an order cancelling registration, passed without assigning any reasons and solely on the ground of non-submission of a reply to a show cause notice, does not stand the test of scrutiny under Article 14 of the Constitution of India. The Court found the cancellation order to be non-speaking and lacking application of mind. The ratio decidendi is that cancellation of GST registration requires proper reasoning and adherence to principles of natural justice, and mere non-submission of a reply cannot be the sole ground for cancellation without due consideration. The petitioner was permitted to appear before the respondent with a reply to the show cause notice and the court's order within three weeks, after which the respondent was directed to pass a fresh order in accordance with law.
Key Issues
1. Whether the order dated 12.05.2022 cancelling the petitioner's GST registration is valid, considering the petitioner's claim of not receiving the show cause notice and the alleged contradictory nature of the order? (Question of mixed law and fact, turning on principles of natural justice and procedural fairness under the GST Act). 2. Whether the appellate order dated 21.01.2023, rejecting the appeal on grounds of delay, is sustainable? Petitioner's arguments: The petitioner contended that the cancellation order dated 12.05.2022 was self-contradictory. It further argued that it was not heard before the order was passed and therefore was entitled to the benefit of this Court's decision in Writ Tax No. 145 of 2022 (Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others), dated 26.09.2022. This precedent held that an order cancelling registration solely on the ground of non-submission of a reply to a show cause notice, without assigning any reasons, is not sustainable. Respondent's arguments: The judgment records no specific arguments from the respondent.
Sections Cited
Section 14 of Constitution of India
AI-generated summary — verify with the full judgment below
Court No. - 5 Case :- WRIT TAX No. - 64 of 2023 Petitioner :- M/S Royal Pollution Control Services, Lko. Thru. Its Proprietor- Mohammad Ziayrrahman Khan Respondent :- Union Of India, Thru. Secy. Ministry Of Finance, New- Delhi, And 5 Others Counsel for Petitioner :- Vaibhav Srivastava Counsel for Respondent :- A.S.G.I. Hon'ble Vivek Chaudhary,J. Heard learned counsel for the petitioner and the learned Standing Counsel for the State. Present petition has been filed challenging the order dated 12.05.2022 passed by the respondent no.6 whereby GST registration of the petitioner has been cancelled and the order dated 21.01.2023, whereby the Appeal No.D-02/2023, not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration. The relevant Paragraphs 9 and 10, of the judgment in Technosum India Pvt. Ltd. Lucknow (Supra), read as under:- "
The Counsel for the petitioner argues that the appeal has been dismissed as being beyond limitation as such the doctrine of merger would not apply and the petitioner is fair entitled to seek judicial review of the order dated 03.01.2022 on the ground that the same is non speaking order. This Court while deciding Writ Tax No.147 of 2022 (M/S Chandrasen,
Thus, following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed." Order Date :- 3.3.2023 Arti/- [Vivek Chaudhary,J.] ARTI MAURYA High Court of Judicature at Allahabad, Lucknow Bench
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.