Pavati Trading Private Limited vs. Deputy Commissioner Of State Tax, Shibpur, Howrah

Facts

The petitioner, Pavati Trading Private Limited & Anr., challenged an order dated 4th September, 2020, passed by the Deputy Commissioner of State Tax, Shibpur, Howrah, rejecting their application for revocation of cancellation of their GST registration. The registration was initially cancelled by an order dated 28th July, 2020. The petitioner had objected to the cancellation on 31st July, 2020. Subsequently, a show-cause notice was issued on 3rd August, 2020, regarding the revocation application, to which the petitioner replied on 6th August, 2020. The petitioner's primary grievance was that the impugned order rejecting the revocation was passed in violation of the principles of natural justice, as the documents or records relied upon by the respondent authority were not provided to the petitioner, preventing them from contradicting the report. The State respondents' counsel could not deny this fact.

Held

The Court held that the impugned order dated 4th September, 2020, rejecting the petitioner's application for revocation of GST registration cancellation, was indeed passed in violation of the principles of natural justice. The Court noted that the State respondents' counsel could not deny the petitioner's assertion that the documents or records relied upon by the respondent authority were not provided to the petitioner. Consequently, the Court set aside the impugned order. The Court directed the Deputy Commissioner of State Tax, Shibpur (respondent No.1), to reconsider the petitioner's application for revocation of cancellation of its registration afresh. This reconsideration must be done in accordance with the law, by passing a reasoned and speaking order, after providing the petitioner with an opportunity of hearing and furnishing the documents that the respondent intends to rely upon for the final adjudication of the application. The Court explicitly stated that it had not gone into the merits of the case and that the respondents must act strictly in accordance with the law. The disposal was to occur within four weeks from the date of communication of the order.

Key Issues

1. Whether the order dated 4th September, 2020, rejecting the petitioner's application for revocation of GST registration cancellation, was passed in violation of the principles of natural justice, specifically concerning the non-furnishing of relied-upon documents to the petitioner, as contemplated under the relevant provisions of the GST Act and Rules? Petitioner's Contention: The petitioner argued that the impugned order violated the principles of natural justice because the respondent authority relied on certain documents or records without providing copies to the petitioner, thereby denying them an opportunity to effectively present their case and contradict the findings. The petitioner contended that this non-disclosure prejudiced their right to a fair hearing. Revenue/State's Contention: The learned advocate for the State respondents was not in a position to deny the fact that the copies of the reports referred to in the impugned order were not furnished to the petitioner. No specific arguments were recorded for the State respondents beyond this admission.