Shandar Husain Rizvi vs. State Of U.P. Thru. Prin. Secy. State Tax (GST/ Vat)U.P. Civil Secrett. Lko. And 2 Others
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The petitioner, Shandar Husain Rizvi, a small businessman, challenges an order dated January 9, 2023, by Respondent No. 2, which dismissed his appeal against the cancellation of his GST registration. The registration was cancelled on April 8, 2022, by Respondent No. 3. The cancellation stemmed from the non-filing of GST returns for six months, for which a show cause notice was issued on March 26, 2022. The petitioner claims he did not receive the show cause notice and thus could not reply within the stipulated seven working days. His appeal was dismissed by the appellate authority for lack of sufficient cause for the delay.
Held
The Court held that the impugned order dated April 8, 2022, cancelling the petitioner's GST registration, was passed without assigning any reasons and solely on the ground that no reply was filed to the show cause notice. This, the Court found, was not a valid ground for cancellation and violated the principles of natural justice and Article 14 of the Constitution of India, as established in the case of Chandra Sarin (Supra). The Court reasoned that a harsh action like cancellation of registration requires application of mind and proper justification, which was absent. Consequently, both the order of cancellation dated April 8, 2022, and the appellate order dated January 9, 2023, were set aside. The petitioner was permitted to appear before the respondent with a reply to the show cause notice and copies of the current order and the Chandra Sarin judgment within three weeks. The respondent was directed to pass a fresh order after considering the petitioner's defense and providing an opportunity of hearing.
Key Issues
1. Whether the cancellation of GST registration solely on the ground of non-submission of a reply to a show cause notice, without considering the merits of the case, is sustainable in law, particularly in light of the principles of natural justice and Article 14 of the Constitution of India? Petitioner's argument: The petitioner contends that the order cancelling his registration was passed without affording him a proper hearing and without assigning any reasons, relying on the judgment in Writ Tax No. 147 of 2022 (Chandra Sarin Vs. Union of India). He argues that non-submission of a reply to a show cause notice cannot be the sole ground for cancellation. He seeks the benefit of the aforementioned judgment. Respondent's argument: The respondent (State) did not record any specific arguments against the petitioner's claim.
Sections Cited
Section 14, Article 14
AI-generated summary — verify with the full judgment below
Court No. - 4 Case :- WRIT TAX No. - 14 of 2023 Petitioner :- Shandar Husain Rizvi Respondent :- State Of U.P. Thru. Prin. Secy. State Tax (Gst/ Vat)U.P. Civil Secrett. Lko. And 2 Others Counsel for Petitioner :- Shivam Sharma Counsel for Respondent :- C.S.C. Hon'ble Vivek Chaudhary,J. Heard learned counsel for the petitioner and the Sri Sanjay Sareen, learned Standing Counsel for the State. Present petition has been filed challenging the order dated 09.01.2023 passed by the respondent no.2, whereby the appeal filed against the cancellation of GST registration dated 08.04.2022 passed by the respondent no.3, has been dismissed. The facts, in brief, are that the petitioner is a small time businessman running a shop and was registered under GST Act. It appears that the GST return was not filed by the counsel and thereafter a show cause notice dated 26.3.2022 was issued on the ground of non-filing of the return for six months show cause notice is not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration. The relevant Paragraphs 8 and 9, of the judgment in Chandra Sarin (Supra), read as under:- "
In the present case from the perusal of the order dated 13.02.2020, clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India, as such, the impugned order dated 13.02.2020 (Annexure - 2) is set aside. The petition is accordingly allowed.
It is, however, directed that the petitioner shall file reply to the show-cause notice within a period of three weeks from today. The Adjudicating Authority i.e. Assistant Commissioner, Lucknow shall proceed to pass fresh order after giving an opportunity of hearing to the petitioner and after considering whatever defence he may take." In view thereof, the present petitioner is also entitled for the same relief. The benefit of the order dated 22.9.2022 passed in Writ Tax No.147 of 2022, shall also be made available to the present petitioner. Accordingly, the present petition is allowed. The orders dated 08.04.2022 as well as the appellate order dated 09.1.2023, is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of this order as well as the copy of the judgment passed in Chandra Sarin (Supra), dated 22.09.2022, within three weeks from today. In case, the petitioner appears along with the reply and the certified copy of this order, the respondents shall proceed to pass a fresh order in accordance with law. (Vivek Chaudhary,J.) Order Date :- 20.1.2023 Arjun/- ARJUN PRASAD 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.