M.S Tiwari Industries Thru. Proprietor Govind Mani Tiwari Lko. vs. Union Of INDIA Thru. Secy. Ministry Finance New Delhi And 5 Others
Original PDF →Facts
The petitioner, M.S Tiwari Industries, challenged the cancellation of its GST registration by respondent no. 6 on 23.01.2021 and the subsequent dismissal of its appeal on 06.02.2023. The petitioner, engaged in motor work, claimed it did not receive the show cause notice dated 10.01.2022, preventing it from filing a reply within the stipulated seven working days. The cancellation order was issued on 23.01.2021. The petitioner's appeal was dismissed by the appellate authority solely on the grounds of delay. The petitioner argued that the cancellation order was contradictory, stating both that a reply was submitted and that it was not.
Held
The Court allowed the petition, setting aside both the order of cancellation of GST registration dated 23.01.2021 and the appellate order dated 06.02.2023. The Court reasoned that the cancellation order was non-speaking and lacked proper application of mind, citing the precedent set in Technosum India Pvt. Ltd. and M/S Chandrasen. The Court held that the mere non-submission of a reply to a show cause notice cannot be the sole ground for cancellation of registration without proper consideration. The ratio decidendi is that orders cancelling GST registration must be reasoned and comply with principles of natural justice. The petitioner was permitted to appear before the respondent with a reply to the show cause notice and copies of the High Court's order and the Technosum India Pvt. Ltd. judgment within three weeks. The respondents were directed to pass a fresh order in accordance with law upon the petitioner's appearance.
Key Issues
1. Whether the order cancelling the petitioner's GST registration, dated 23.01.2021, is a non-speaking order and thus liable to be set aside, as argued by the petitioner? 2. Whether the dismissal of the petitioner's appeal on grounds of delay, without considering the merits of the cancellation order, is sustainable, as contended by the petitioner? The petitioner argued that the cancellation order was contradictory and lacked reasons, violating principles of natural justice and Article 14 of the Constitution of India. They relied on the High Court's judgment in Writ Tax No. 145 of 2022 (Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others) and Writ Tax No. 147 of 2022 (M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India and others), which held that non-speaking orders of cancellation are not sustainable. The revenue or State did not record any specific arguments in the judgment.
Sections Cited
Section 14 of Constitution of India
AI-generated summary — verify with the full judgment below
Court No. - 5 Case :- WRIT TAX No. - 48 of 2023 Petitioner :- M.S Tiwari Industries Thru. Proprietor Govind Mani Tiwari Lko. Respondent :- Union Of India Thru. Secy. Ministry Finance New Delhi And 5 Others Counsel for Petitioner :- Sanjieva Shankhdhar,Durga Prasad Dubey Counsel for Respondent :- A.S.G.I.,C.S.C. Hon'ble Vivek Chaudhary,J. 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, Sarda Nagar, Lucknow vs Union of India and others) had held that the order of cancellation of registration or any other order passed either on administrative or on judicial side is without any reason and prima facie, without application of mind, the same does not stand the test of scrutiny under Article 14 of the Constitution of India.
Thus, following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed." [Vivek Chaudhary J.] Order Date :- 27.2.2023 -Amit K- AMIT KUMAR 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.