Bajrang Trading Company vs. State Of U.P. And 2 Others

Held

The Court held that the writ petitioner's registration was sought to be cancelled, and in such circumstances, an adequate opportunity of hearing should have been granted. The Court found that the petitioner's reply, whether by post or email, was not properly considered, or at least the petitioner's assertion of attempting to reply was not adequately addressed. The Court reasoned that principles of natural justice mandate a fair hearing. Therefore, the impugned order dated December 1, 2018, cancelling the registration, was set aside. The Court directed the Assistant Commissioner to grant the petitioner an opportunity of hearing and decide the issue afresh after considering the petitioner's reply, which was already on record. The entire exercise was to be completed expeditiously, preferably within six weeks but not later than eight weeks from the communication of the order. No specific issue was left undecided.

Facts

The petitioner, Bajrang Trading Company, through its proprietor Binod Kumar Shaw, filed a writ petition challenging an order dated December 1, 2018, passed by the Assistant Commissioner, Commercial Tax, Sector-3, Kanpur. This order cancelled the petitioner's GST registration effective November 26, 2018. The cancellation stemmed from a show cause notice dated November 19, 2018, which alleged that the registration was obtained by means of fraud, wilful misstatement, or suppression of facts. The petitioner claimed their lawyer sent a reply, but it was returned by the post office due to an incorrect PIN code. The petitioner also asserted that an electronic reply was sent to the originating email address. The State contended the email address was wrong. The petitioner sought quashing of the cancellation order and a direction to revoke it.

Key Issues

1. Whether the cancellation of the petitioner's GST registration was vitiated due to a lack of adequate opportunity of hearing, contrary to principles of natural justice, as argued by the petitioner? 2. Whether the Assistant Commissioner, Commercial Tax, Sector-3, Kanpur, acted arbitrarily and illegally in cancelling the registration without considering the petitioner's reply, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that they were not afforded adequate opportunity of hearing. They contended that their lawyer's reply to the show cause notice was returned due to a postal error (incorrect PIN code) and that an electronic reply was sent to the correct email address. They relied on the principle of natural justice, emphasizing that a registration should not be cancelled without a proper hearing and consideration of their response. Respondent's Arguments: The State-respondents, through their affidavit, stated that the email address used by the petitioner for their reply was incorrect. They did not explicitly argue on the merits of the cancellation but implicitly supported the Assistant Commissioner's action by highlighting the petitioner's failure to respond effectively.