Mahadev Prasad Gupta vs. State Of U.P. And 2 Others

WTAX/1745/2024HC AllahabadGSTCNR UPHC01537280202410 March 20253 pages

For Petitioner: Vedika Nath, Yashonidhi, Shukla

AI SummaryRemanded

Facts

The petitioner, Mahadev Prasad Gupta, challenged two orders: one dated 3rd November, 2020, by the Assistant Commissioner, State Goods and Service Tax Act, and another dated 8th August, 2024, by the Additional Commissioner, Grade-II Appeal. The petitioner argued that his GST registration was cancelled without application of mind. He pointed out a contradiction in the Assistant Commissioner's order, which first referenced a reply to a show-cause notice and then stated no reply was submitted. The petitioner contended that his subsequent appeal was also dismissed without considering the available material. The State-respondents supported the impugned orders, asserting no illegality.

Held

The Court held that the cancellation of the petitioner's GST registration and the subsequent dismissal of his appeal were unsustainable in law. The Court found that the order dated 3rd November, 2020, cancelling the GST registration, was passed without assigning any reason and contained a clear contradiction regarding the submission of a reply to the show-cause notice. This demonstrated a non-application of mind by the Assistant Commissioner. The appellate order also failed to return any finding. Citing Division Bench judgments in M/S Mahadevi Construction and Surendra Bahadur Singh, and Single Bench judgments, the Court reiterated that cancelling registration without a proper response clearly reflects non-application of mind. Consequently, both impugned orders were set aside, and the matter was remanded to the Assistant Commissioner for a fresh decision, requiring a reasoned and speaking order after affording an opportunity of hearing to the petitioner within two months.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the Assistant Commissioner, State Goods and Service Tax Act, on 3rd November, 2020, was passed without due application of mind, thereby violating principles of natural justice and relevant GST provisions? 2. Whether the dismissal of the petitioner's appeal by the Additional Commissioner, Grade-II Appeal, on 8th August, 2024, was erroneous due to non-consideration of material on record and the alleged non-application of mind by the lower authority? Petitioner's Contention: The petitioner argued that the order cancelling his GST registration was passed without application of mind, evidenced by contradictory statements within the order itself regarding the submission of a reply to the show-cause notice. He further contended that the appellate order also failed to consider the material on record. Reliance was placed on judgments from the Allahabad High Court, including Surendra Bahadur Singh, M/s Mahadevi Construction, M/S National Traders, New Shanti Restaurant, and Suman Singh. Revenue's Contention: The State-respondents supported the impugned orders, contending that there was no illegality or infirmity warranting interference by the Court.

Sections Cited

Section 129

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Court No. - 2 Case :- WRIT TAX No. - 1745 of 2024 Petitioner :- Mahadev Prasad Gupta Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Vedika Nath,Yashonidhi Shukla Counsel for Respondent :- C.S.C. Hon'ble Piyush Agrawal,J. 1. Heard learned counsel for the petitioner and the learned Additional Chief Standing Counsel for the State-respondents. 2. By means of the present writ petition, the petitioner is challenging the order dated 8th August, 2024 passed by respondent no.2 i.e. Additional Commissioner, Grade-II Appeal, Jhansi as well as the order dated 3rd November, 2020 passed by respondent no.3 i.e. Assistant Commissioner, State Goods and Service Tax Act, Sector-I, Hamirpur. 3. Learned counsel for the petitioner submits that GST registration of the petitioner has been cancelled without application of mind as the first line of impugned order dated 3rd November, 2020 shows that the said order has been passed in reference to the reply dated 20th October, 2020 submitted in response to the show-cause notice dated 19th October, 2020, whereas the second line of order shows that no reply to the show-cause notice has been submitted. He further submits that the order impugned shows that the same has been passed without application of mind due to which the appeal was preferred by the petitioner but the same has also been dismissed without considering the material available on record. 4. To buttress the aforesaid submission, learned counsel for the petitioner relies upon the judgments of Division Bench of this Court passed in the case of Surendra Bahadur Singh Vs. State of U.P., 2023 (77) G.S.T.L. 331 (All.) and M/s Mahadevi Construction Vs. State of U.P. and Another (Writ Tax No 673 of 2025) as well as judgments of Single Bench passed in the cases of M/S National Traders and Another Vs. State of U.P. and 2 others (Writ Tax No. 989 of 2024) and New Shanti Restaurant Vs. State of U.P. and 2 others (Writ Tax No. 1597 of 2024) as well as the judgment passed by this Court dated 6th March, 2025 in the case of Suman Singh Vs. State of U.P. & 2 Others (Writ Tax No. 1862 of 2024). 5. Per contra, learned Additional Chief Standing Counsel for the State-respondents supports the impugned orders passed by respondent nos. 2 and 3 by contending that there is no illegality or infirmity in the same so as to warrant any interference by this Court. 6. I have considered the submissions made by the learned counsel for the parties and have gone through the records of the present writ petition specially the impugned orders. 7. This Court finds that the GST registration of the petitioner has been cancelled in a single line, as no reason has been assigned in the impugned order as also the appeal filed against the same has also been dismissed by the appellate court which has also not returned any finding to the same. 8. The issue in hand is no longer res integra. This Court on various occasions has quashed the cancellation order and remanded the matter to the authority concerned for decision afresh. 9. The Division Bench of this Court in the case of M/S Mahadevi Construction Singh (supra) has specifically held that in case no response receives, to cancel the registration on non-receipt of any response clearly reflects non-application of mind by the officer for passing the order impugned. 10. The similar view has been expressed by the Division Bench of this Court in the case of Surendra Bahadur Singh as also this Court in the case of Suman Singh (supra). 11. Thus, the record shows that while cancelling the GST registration of the petitioner, no reason has been assigned. The first line of the impugned order 3rd November, 2020 shows that the said order has been passed in reference to the reply dated 20th October, 2020 submitted to the show- cause notice dated 19th October, 2020, whereas the second line of the said order shows that no reply was submitted to the show-cause notice issued. From the aforesaid it is clear that the respondent no.3, while cancelling the registration of the petitioner, has not applied its mind passing

the impugned order.

12.

In view of the judgments referred to above as well as the judgment passed by this Court in the case of Suman Singh (supra), the impugned orders passed by respondent nos. 2 and 3 cannot be sustained in the eyes of law and matter requires reconsideration.

13.

Accordingly, the impugned order dated 8th August, 2024 passed by respondent no.2 i.e. Additional Commissioner, Grade-II Appeal, Jhansi as well as the order dated 3rd November, 2020 passed by respondent no.3 i.e. Assistant Commissioner, State Goods and Service Tax Act, Sector-I, Hamirpur are set aside.

14.

The matter is remanded to respondent no.3 to decide the matter afresh in accordance with law by passing a reasoned and speaking order after affording opportunity of hearing to the stakeholders within a period of two months from the date of production of a certified copy of this order.

15.

The writ petition stands allowed. (Piyush Agrawal, J.) Order Date :- 11.3.2025 Sushil/- SUSHIL KUMAR SINGH High Court of Judicature at Allahabad

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.