M/S Fortis Electricals And Supplier vs. Principal Commissioner GST & Anr.

Facts

The petitioner, M/s Fortis Electricals and Supplier, filed a writ petition challenging an order dated June 20, 2024, by which its application for cancellation of GST registration was rejected. The rejection order, issued by the Sales Tax Officer Class II/AVATO, Ward 14, cited an unsatisfactory reply filed on February 15, 2024, but failed to provide specific reasons for the rejection. The petitioner noted that a previous proceeding initiated by the respondents for cancellation of its registration had been dropped on October 13, 2023. The respondents, represented by Mr. Rajeev Aggarwal, acknowledged the lack of specific reasons in the impugned order and suggested that the matter be re-examined by the respondents.

Held

The Court allowed the writ petition and quashed the impugned order dated June 20, 2024. The Court found that the impugned order failed to assign any reasons for the rejection of the petitioner's application for cancellation of its GST registration. The Court accepted the submission made by the revenue that the matter should be examined afresh. Consequently, the Court directed that the petitioner's application for cancellation of its registration shall be taken up for consideration again and disposed of in accordance with the law. The ratio decidendi is that an order rejecting an application for cancellation of registration must provide specific reasons to be legally sustainable. No issues were expressly left undecided.

Key Issues

1. Whether the order dated June 20, 2024, rejecting the petitioner's application for cancellation of GST registration is sustainable in law, given its failure to assign specific reasons for rejection, thereby potentially violating principles of natural justice and the provisions of the Central Goods and Services Tax Act, 2017, and related Rules. The petitioner argued that the impugned order was unsustainable due to the complete absence of specific reasons for rejecting its application for cancellation of registration, making it impossible to ascertain the basis of the decision. The petitioner contended that this lack of reasoning violated fundamental principles of administrative law. The revenue, through its counsel, conceded that the impugned order lacked specific reasons and proposed that the Court permit the respondents to re-examine the petitioner's application afresh and dispose of it in accordance with the law, rather than keeping the writ petition pending.