Bhumi Tech INDIA Networking,Faizabad Thru. Proprietor Ram Bhawan vs. The Commissioner, Commercial Tax, U.P. Lko. And 2 Others

Facts

The petitioner, Bhumi Tech India Networking, through its proprietor Ram Bhawan, challenged an order dated 14.09.2022 that cancelled its GST registration. The petitioner also challenged a subsequent order dated 25.09.2023 which dismissed its appeal against the cancellation order on the grounds of delay. The petitioner contended that the cancellation order was based on a show-cause notice dated 31.08.2022 and a reply filed on 09.09.2022, neither of which were served on or filed by the petitioner. Furthermore, the petitioner argued that the cancellation order lacked any reasoning. The petitioner relied on a previous judgment of the High Court in the case of M/s Chandra Sain, Sarda Nagar, Lucknow Thru. Its Proprietor v. U.O.I & Ors. (Writ Tax No.147 of 2022) dated 22.09.2022.

Held

The Court held that the order cancelling the petitioner's GST registration dated 14.09.2022 could not be sustained. The reasoning was that the order was passed without proper service of the show-cause notice and without considering any defense from the petitioner, violating principles of natural justice. The Court also noted the lack of reasoning in the cancellation order. Following the precedent set in M/s Chandra Sain (supra), where similar facts led to the quashing of the cancellation order, the Court found the present case to be analogous. Consequently, the order dated 14.09.2022 was quashed. As a result, the subsequent appellate order dated 25.09.2023, which dismissed the appeal on grounds of delay, also lost its significance and was quashed. The Court granted liberty to the respondents to pass a fresh order after issuing a show-cause notice in accordance with law and after considering any defense offered by the petitioner. The writ petition was allowed.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, dated 14.09.2022, is valid if it was passed without proper service of the show-cause notice and without considering any reply from the petitioner, and if it lacks adequate reasoning? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). 2. Whether the dismissal of the petitioner's appeal on grounds of delay, dated 25.09.2023, is sustainable when the primary order of cancellation is itself challenged as invalid? Petitioner's arguments: The petitioner argued that neither the show-cause notice nor any reply was served or filed, rendering the cancellation order procedurally flawed. They also contended that the cancellation order was bereft of reasoning. The petitioner asserted that the facts of this case are squarely covered by the High Court's judgment in M/s Chandra Sain (supra). Respondent's arguments: The Standing Counsel for the State did not record any specific arguments against the petitioner's contentions.