M/S Rajveer Constructions vs. State Of Up And 2 Others

Facts

The petitioner, M/s Rajveer Constructions, assailed an order dated April 6, 2021, passed by the Assistant Commissioner, State Tax, Prayagraj, cancelling its GST registration. The petitioner also challenged an order dated September 11, 2024, by which its appeal was dismissed by respondent no. 2 as barred by limitation under Section 107(4) of the UPGST Act. The petitioner argued that the registration cancellation order was passed mechanically without application of mind and without assigning reasons, violating Article 19 of the Constitution. It also contended that its appeal was dismissed without considering the detailed reasons provided for the delay. The respondents supported the impugned orders, stating that registration was cancelled due to non-filing of returns and tax, and the appeal was rejected for being time-barred.

Held

The Court held that the order dated April 6, 2021, cancelling the petitioner's GST registration was unsustainable in law. It found that no reasons were assigned for the cancellation, making the order a nullity. The Court emphasized that reasons are the heart and soul of any judicial and administrative order and their absence renders the order unjustifiable. The Court cited its own previous decisions in M/s Chandra Sain and Om Prakash Mishra, which held that orders passed without application of mind and without assigning reasons violate Article 14 of the Constitution. Consequently, the order of cancellation was quashed. Regarding the appeal dismissal, the Court noted that since the primary order of cancellation was being set aside, the doctrine of merger would not apply. The Court directed the petitioner to file a reply to the show cause notice within three weeks, and the Adjudicating Authority was instructed to pass a fresh order after providing an opportunity of hearing to the petitioner and considering its defense. The issue of the appeal being barred by limitation was rendered moot by the quashing of the original cancellation order.

Key Issues

1. Whether the order cancelling the petitioner's GST registration, dated April 6, 2021, is valid in law, considering it was allegedly passed without application of mind and without assigning reasons, thereby violating Article 14 of the Constitution of India? (Section 29 of the Act) 2. Whether the dismissal of the petitioner's appeal, dated September 11, 2024, solely on the ground of limitation, without considering the reasons provided for the delay, is sustainable? (Section 107(4) of the UPGST Act) Petitioner's Arguments: The petitioner argued that the cancellation order was passed mechanically, without application of mind, and lacked reasons, violating Article 19 of the Constitution. It relied on judgments in Writ Tax No. 100 of 2022 (Om Prakash Mishra vs. State of U.P.) and Writ Tax No. 147 of 2022 (M/s Chandra Sain vs. U.O.I.) and the Supreme Court's decision in Whirlpool Corporation vs. Registrar of Trademarks. The petitioner also contended that the appeal was dismissed without considering the detailed reasons for the delay. Respondent's Arguments: The respondent supported the impugned orders, asserting that registration was cancelled due to the petitioner's failure to file returns and tax. They further argued that the appeal was correctly rejected as it was filed beyond the limitation period prescribed under Section 107(4) of the Act.