M/S Pandey Construction Badhanjotiya Thru. Its Pro. Mr. Jitendra Nath Pandey vs. State Of U.P. Thru. Addl. Chief Secy. State Tax And 2 Others

/80/2024HC AllahabadGSTCNR UPHC02024911202430 April 2024Bench: SUBHASH VIDYARTHI3 pages

For Petitioner: Ashish Kumar Singh

AI SummaryAllowed

Facts

The petitioner, M/s Pandey Construction, challenged an order dated January 10, 2023, passed by the Assistant Commissioner, Gonda, Sector-2, cancelling its GST registration. The petitioner stated that all GST communications were handled by their counsel, who failed to provide timely instructions, leading to the expiry of the 30-day limitation period for filing an appeal. The petitioner argued that the cancellation order itself contained contradictory statements: it mentioned considering the petitioner's reply dated October 30, 2022, while simultaneously stating that no reply was submitted. The petitioner contended that this indicated a non-application of mind by the authority.

Held

The Court held that the impugned order dated January 10, 2023, cancelling the petitioner's GST registration, was unsustainable in law. The Court found that the order suffered from a total non-application of mind by the Assistant Commissioner. This was evident from the contradictory statements within the order itself, which indicated that it was passed in reference to the petitioner's reply dated October 30, 2022, but also stated that no reply had been submitted. Furthermore, the contents of the petitioner's reply were not taken into consideration. The Court reasoned that a judicial order cannot be passed without providing sufficient reasons. While acknowledging that the bar of limitation might prevent a statutory appeal, the Court emphasized that it does not bar a constitutional remedy under Article 226, particularly when the order affects valuable rights and is passed without proper reasoning. Accordingly, the Court set aside the impugned order and directed the Assistant Commissioner to pass a fresh order after considering the petitioner's reply dated October 30, 2022. The respondent was also granted liberty to initiate fresh proceedings, if necessary, after providing the petitioner an adequate opportunity to present their case.

Key Issues

1. Whether the order cancelling the petitioner's GST registration is invalid due to a non-application of mind by the authority, as evidenced by contradictory statements within the order itself, specifically concerning the submission and consideration of the petitioner's reply dated October 30, 2022, to the show cause notice dated October 18, 2022? (Question of law) Petitioner's arguments: The petitioner argued that the cancellation order was unreasoned and passed without applying its mind. They pointed to the contradictory statements in the order, which claimed to consider the petitioner's reply while also stating no reply was filed, as proof of this non-application of mind. The petitioner further argued that while the limitation period for appeal might bar a statutory remedy, it does not preclude seeking constitutional remedy under Article 226, especially when a valuable right is affected by an arbitrary order. Revenue's arguments: The judgment records no specific arguments made by the respondent State.

Sections Cited

Article 226

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Neutral Citation No. - 2024:AHC-LKO:33625 Court No. - 19 Case :- WRIT TAX No. - 80 of 2024 Petitioner :- M/S Pandey Construction Badhanjotiya Thru. Its Pro. Mr. Jitendra Nath Pandey Respondent :- State Of U.P. Thru. Addl. Chief Secy. State Tax And 2 Others Counsel for Petitioner :- Ashish Kumar Singh Counsel for Respondent :- C.S.C. Hon'ble Subhash Vidyarthi,J. 1. Heard Sri Ashish Kumar Singh, the learned counsel for the petitioner, Sri Sanjay Sarin, the learned Additional Chief Standing Counsel appearing on behalf of the State and perused the records. 2. By means of the instant writ petition filed under Article 226 of the Constitution of India the petitioner has challenged the validity of an order dated 10.01.2023, the Assistant Commissioner, Gonda, Sector-2 cancelling the GST registration of the petitioner. 3. A supplementary affidavit has been filed by the petitioner stating that the petitioner is a businessman and all communications regarding GST is made through his counsel, who failed to give timely instructions regarding cancellation of his registration due to which the prescribed period of limitation for filing an appeal against the cancellation order expired and no appeal could be filed after 30 days since expiry of the prescribed period of limitation as the authority has no power to condone any delay in filing appeal. 4. The cause shown appears to be sufficient. The perusal of the order dated 10.01.2023 indicates that it is recorded in the impugned order that "in reference to your reply dated 30.10.2022 in response to the notice to show cause dated 18.10.2022, whereas no reply to the notice to show cause has been submitted." 5. The submission of the learned counsel for the petitioner is that the aforesaid contents of the cancellation order indicate a total non application of mind by the authority concerned while cancelling the G.S.T registration of the petitioner as on the one hand the order states that it was being passed with reference to the petitioner's reply dated 30.10.2022 but at the same time order states that the petitioner had not submitted any reply to the show cause notice. The contents of the petitioner's reply dated 30.10.2022 have also not been taken into consideration

while passing of the impugned order.

Such an unreasoned order cannot be sustained in law as no judicial order can be passed without giving sufficient reasons for passing of the order.

Bar of limitation may bar the remedy of appeal but it does not bar the petitioner's right to seek his constitutional remedy under Article 226 of the Constitution of India, particularly when the impugned order affects valuable rights of the petitioner and the same has been passed without assigning any reason.

Accordingly, the writ petition is allowed. The orders dated 10.01.2022 passed by the Assistant Commissioner, Sector 2, Sitapur (B) is hereby set aside and the learned Assistant Commissioner, Lucknow Sector 2, is directed to pass a fresh order after taking into consideration the submissions made by the petitioner in the reply dated 30.10.2022 given in response to the show cause notice dated 18.10.2022. 9. The Respondent No.3 shall be at liberty to initiate fresh proceedings, in accordance with law, after giving adequate opportunity to the petitioner to present his case and after taking consideration the pleas taken by the petitioner, if any. . (Subhash Vidyarthi, J.) Order Date :- 30.4.2024 Ram. RAM SINGH 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.