M/S Hari Shanker vs. State Of U P And 2 Others

Held

The Court allowed the writ petition and set aside the orders dated 26.03.2021, 10.12.2019, and 09.02.2021. The Court found that the Proper Officer's order dated 10.12.2019 contained a clear contradiction: it first acknowledged the petitioner's reply dated 08.12.2019 in response to the show-cause notice dated 29.11.2019, and then, in the very next sentence, stated that no reply was filed. The Court held that this was a casual and contradictory approach. Furthermore, the Court noted that there was no discussion on the merits of the case or the effect of the petitioner's reply. The subsequent filing of returns and discharge of liability indicated that the petitioner may have remained in existence. The cancellation was deemed to have been done hurriedly without proper consideration. The matter was remitted to the Proper Officer to pass a fresh order, taking into account the petitioner's reply dated 08.12.2019 and the facts presented in the recall application. The exercise was to be completed within one month.

Facts

The petitioner, M/s Hari Shanker, filed a writ petition challenging the order dated 26.03.2021 by which their appeal was dismissed, and the order dated 09.02.2021 rejecting their recall application. The primary challenge was to the order dated 10.12.2019, which cancelled the petitioner's GST registration under the U.P. GST Act, 2017. The cancellation was based on a notice dated 29.11.2019 stating that the petitioner had not filed returns for a continuous period of six months. The petitioner claims to have filed a reply on 08.12.2019. The order dated 10.12.2019, while referencing the reply dated 08.12.2019, also stated that no reply was submitted. The petitioner later filed returns and discharged admitted tax liability before filing a recall application, which was rejected.

Key Issues

1. Whether the cancellation of the petitioner's GST registration was valid, considering the conflicting statements in the order dated 10.12.2019 regarding the submission of a reply to the show-cause notice dated 29.11.2019, and whether this issue turns on the interpretation of the Proper Officer's order and the procedural fairness under the U.P. GST Act, 2017. Petitioner's arguments: The petitioner contended that the cancellation order was erroneous because the Proper Officer's order dated 10.12.2019 itself acknowledged the petitioner's reply dated 08.12.2019, yet proceeded to state that no reply was filed. They argued that the cancellation was done hurriedly without considering their reply and that they had subsequently filed returns and discharged their tax liability. Revenue's arguments: The revenue, through its counter-affidavit, claimed that the petitioner had not filed any reply on 08.12.2019. The judgment does not record any other specific arguments from the revenue.