Ferritz Global Company vs. The Deputy State Tax Officer

Facts

The petitioner, Fenitz Global Company, filed a writ petition challenging the order dated 27.03.2025 passed by the Deputy State Tax Officer, Jeedimetla-II, cancelling its GST registration. The petitioner had received a show cause notice dated 07.02.2025, to which it filed a draft reply on 10.02.2025. However, the cancellation order stated that no reply was filed, while also mentioning in capital letters that a reply was submitted but not with proper documents. The petitioner contended that these findings were contradictory and that the cancellation order was passed without proper opportunity to be heard and without considering its reply, violating principles of natural justice. The petitioner sought setting aside of the cancellation order and a direction to consider its reply and grant a personal hearing.

Held

The Court held that there was substance in the petitioner's argument. Upon examining the impugned order, the Court found mutually inconsistent findings regarding the submission of the petitioner's reply. The opening paragraph stated no reply was filed, while a subsequent paragraph in capital letters indicated a reply was submitted but not with proper documents. This contradiction, the Court observed, warranted setting aside the order. The Court reasoned that such inconsistencies undermine the fairness of the process and violate the principles of natural justice. Consequently, the impugned order of cancellation of registration dated 27.03.2025 was set aside. The petitioner was directed to appear before the Respondent No. 1 on 22.04.2025 at 11:30 am for a personal hearing, after which the Respondent No. 1 was to pass a fresh order in accordance with law. The Court explicitly stated that no opinion was expressed on the merits of the case.

Key Issues

1. Whether the order of cancellation of GST registration passed by the Deputy State Tax Officer is illegal, arbitrary, and violative of the principles of natural justice, specifically concerning the contradictory findings regarding the submission of the petitioner's reply and the lack of a proper opportunity for a hearing, thereby contravening the principles laid down in WP No. 8232 of 2024? Contentions: Petitioner: Argued that the impugned cancellation order suffers from contradictory findings regarding the submission of its reply to the show cause notice. It contended that the order stated no reply was filed, yet also mentioned in capital letters that a reply was submitted but lacked proper documents. The petitioner asserted that this, coupled with the lack of a personal hearing, renders the order illegal and arbitrary, violating natural justice. It sought the setting aside of the order and a direction for consideration of its reply and a personal hearing. Respondents: The Special Government Pleader for State Tax had no objection to the petitioner's prayer.