M/S Lucky Int Udyog, Gonda Through Its Proprietor Arshad Husain vs. Commissioner, State Tax GST, U.P. Commercial Tax, Lucknow And 2 Others

Facts

The petitioner, M/s Lucky Int Udyog, Gonda, challenged two orders: one dated 01.04.2022 cancelling its GST registration and another dated 27.12.2022 dismissing its appeal. The petitioner, engaged in motor work, claims its GST return was not filed by its counsel. A show cause notice was issued on 10.01.2022, requiring a reply within seven working days. The petitioner contends it did not receive this notice and thus could not submit a reply. Consequently, an order dated 23.01.2021 (note: judgment states 23.01.2021 for cancellation, but 01.04.2022 for the impugned order under challenge, suggesting a discrepancy or earlier event) cancelled the registration. The subsequent appeal was dismissed by the appellate authority on grounds of delay.

Held

The Court allowed the petition, setting aside the impugned orders dated 01.04.2022 and 27.12.2022. The Court reasoned that the petitioner was entitled to the benefit of the judgment in Writ Tax No.145 of 2022 (Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others) dated 26.09.2022. This precedent established that an order cancelling GST registration solely on the ground of non-submission of a reply to a show cause notice, without proper application of mind or assigning reasons, is unsustainable and violates Article 14 of the Constitution. The Court found the petitioner's situation analogous, particularly concerning the alleged non-receipt of the show cause notice and the subsequent dismissal of the appeal. The operative direction is that the petitioner is permitted to appear before the respondent within three weeks with a reply to the show cause notice and certified copies of the High Court's current order and the Technosum India judgment. Upon compliance, the respondent is directed to pass a fresh order in accordance with the law. No issue was expressly left undecided.

Key Issues

1. Whether the order dated 01.04.2022 cancelling the petitioner's GST registration and the order dated 27.12.2022 dismissing the appeal are valid, considering the petitioner's claim of non-receipt of the show cause notice and the alleged self-contradictory nature of the initial cancellation order? Petitioner's arguments: The petitioner argues that the order dated 23.01.2021 (presumably the basis for the later impugned order) is self-contradictory, stating both that a reply was submitted and that it was not. Crucially, the petitioner contends it did not receive the show cause notice and therefore could not respond. It relies on the High Court's judgment in Writ Tax No.145 of 2022 (Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others) dated 26.09.2022, which held that non-submission of a reply to a show cause notice cannot be the sole ground for cancellation and that non-speaking orders are invalid under Article 14 of the Constitution. Respondent's arguments: The judgment records no specific arguments from the respondent (Commissioner, State Tax GST, U.P.).