M/S Ajay Building Material vs. State Of U.P. And 2 Others
Original PDF →Facts
The petitioner, M/s Ajay Building Material, challenged an order dated 01.12.2020 that cancelled its GST registration and a subsequent appellate order dated 30.12.2021 that dismissed its appeal. The petitioner received a show-cause notice dated 20.11.2020 alleging non-filing of returns for six continuous months. The petitioner contends that the show-cause notice did not specify a date and time for hearing. Consequently, the GST registration was cancelled on 01.12.2020 without assigning any reasons. The petitioner filed an appeal, attaching documents to refute the allegations, though these proofs were filed after the appeal. The appellate authority, however, dismissed the appeal based on grounds not mentioned in the show-cause notice.
Held
The Court held that the order dated 01.12.2020 cancelling the petitioner's GST registration clearly fell short of the requirements of Article 14 of the Constitution of India due to the absence of a fixed date and time for hearing in the show-cause notice. Furthermore, the appellate order dated 30.12.2021 was found to have exceeded the powers conferred upon the appellate authority. This was because the appellate authority decided the appeal on issues that were neither part of the show-cause notice nor considered when the initial cancellation order was passed. Consequently, both the cancellation order dated 01.12.2020 and the appellate order dated 30.12.2021 were set aside. The matter was remanded back to the concerned authority to pass a fresh order after providing the petitioner with an adequate opportunity of hearing in accordance with the law. No specific issue was expressly left undecided.
Key Issues
1. Whether the order cancelling the petitioner's GST registration dated 01.12.2020 is violative of Article 14 of the Constitution of India for failing to fix a date and time for hearing in the show-cause notice? 2. Whether the appellate order dated 30.12.2021 is valid, considering it decided the appeal on grounds alien to the show-cause notice and the original cancellation order? Petitioner's Arguments: The petitioner argued that the cancellation order was passed without providing a proper opportunity of hearing, as the show-cause notice lacked a specified date and time for hearing. They further contended that the appellate authority exceeded its jurisdiction by deciding the appeal on grounds not raised in the show-cause notice or considered in the initial cancellation order. The petitioner relied on this Court's judgments in M/s Chandra Sain v. U.O.I & Ors. and M/S Precitech Engineeers v. State of U.P. & Ors., which dealt with the issue of non-mentioning of date and place of hearing. Respondent's Arguments: The judgment records no specific arguments made by the respondent.
Sections Cited
Article 14
AI-generated summary — verify with the full judgment below
Court No. - 6 Case :- WRIT TAX No. - 844 of 2022 Petitioner :- M/S Ajay Building Material Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C. Hon'ble Pankaj Bhatia,J. Present petition has been filed challenging the order dated 01.12.2020 whereby GST registration of the petitioner has been cancelled as well as the order dated 30.12.2021 whereby the appeal has been dismissed. Contention of learned counsel for the petitioner is that the petitioner was served with a show-cause notice dated 20.11.2020 whereby it was alleged that taxpayer has not filed returns for a continuous period of six months. He argues that in the show-cause notice, no date and time was fixed for hearing. He argues that without fixing any date and time for hearing, an order came to be passed on 01.12.2020 cancelling the GST registration of the petitioner without assigning any reason whatsoever. He further argues that against the order dated 01.12.2020 an appeal was preferred and alongwith the appeal, the petitioner had annexed the documents demonstrating that the allegations in the show-cause notice were incorrect. He further clarifies that the said proof with regard to filing of the returns was filed subsequent to the filing of the appeal. The appeal was heard by the appellant authority, however, going beyond the allegations levelled in the show-cause notice and going beyond the reasons for cancellation for registration, the appellate authority dismissed the appeal on the grounds which were alien to the show-cause notice. Learned counsel for the petitioner relies upon a judgment passed by this Court in the case of M/s Chandra Sain, v. U.O.I & Ors. (Writ Tax No.147 of 2022) decided on 22.09.2022 as well as M/S Precitech Engineeers v. State of U.P. & Ors. (Writ Tax No.1583 of 2022) decided on 14.03.2023 whereby the issue with regard to non-mentioning of date and place of hearing was also considered. Considering the said two judgments, I am of the firm view that the order dated 01.12.2020 clearly falls short of the requirement of Article 14 of the Constitution of India. The appellate order dated 30.12.2021 clearly exceeds the power conferred upon the appellate authority as it decides the appeal on the issues which were neither a part of the show-cause notice nor was a consideration when the order dated 01.12.2020 was passed. In the light of the said, both the orders i.e. 01.12.2020 & 30.12.2021 are set aside. The matter is remanded back to the authority concerned to pass a fresh order after giving an opportunity of hearing to the petitioner in accordance with law. The writ petition is disposed off in above terms. Order Date :- 27.3.2023 nishant NISHANT MOHAN 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.