M/S Archana Thru Ms. Archana, Near I.T.I. Jagdishpur, Amethi Thru. Proprietor Archana vs. State Of U.P. Thru. Prin. Secy., Tax And Registration, Lucknow And Others

Facts

The petitioner, M/s Archana, assailed an order dated 23.07.2022 passed by the Assistant Commissioner, Sector 1, State Tax, Amethi, which cancelled its GST registration. The petitioner also challenged an order dated 24.04.2024 by which its appeal against the cancellation order was dismissed by respondent no. 3 as barred by limitation under Section 107(4) of the UPGST Act. The petitioner argued that the cancellation order was passed mechanically without application of mind and without assigning any reasons. The appeal was dismissed solely on grounds of delay, with the petitioner claiming that detailed reasons for the delay were provided but not considered. The writ petition was entertained due to the non-functionality of the GST Tribunal in Uttar Pradesh.

Held

The Court held that the order dated 23.07.2022 cancelling the petitioner's GST registration was passed without assigning any reasons, which is contrary to established legal principles and various judgments of the Court, including those cited by the petitioner. The Court emphasized that reasons are the heart and soul of any judicial and administrative order, and their absence renders the order legally unsustainable. The Court also noted that since the appeal was dismissed on the ground of delay, the doctrine of merger would not apply in this case. Consequently, the order of cancellation was quashed. The Court directed the petitioner to file a reply to the show cause notice within three weeks, and the Adjudicating Authority (Assistant Commissioner) was ordered to pass a fresh order after providing an opportunity of hearing to the petitioner and considering their defense. The Court found that the cancellation order, being without application of mind and reasons, failed to satisfy the test of Article 14 of the Constitution of India.

Key Issues

1. Whether the order dated 23.07.2022 cancelling the petitioner's GST registration, passed by the Assistant Commissioner, was validly passed without application of mind and without assigning reasons, thereby violating Article 14 of the Constitution of India and Section 29 of the Act? 2. Whether the dismissal of the petitioner's appeal by respondent no. 3 on the ground of limitation, without considering the reasons provided for the delay, was justified? Petitioner's Arguments: The petitioner contended that the order cancelling registration was passed mechanically, without application of mind, and lacked reasons, violating Article 14 of the Constitution and the intent of the Act. They 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. They further argued that since the appeal was dismissed on delay and not on merits, the doctrine of merger would not apply, and the original cancellation order, being devoid of reasons, could be challenged directly. The cancellation order adversely affected their right to conduct business under Article 19 of the Constitution. Respondent's Arguments: The State supported the impugned orders, stating that proceedings were initiated against the petitioner for non-filing of returns and tax, leading to registration cancellation. They maintained that the appeal was rightly rejected as it was filed beyond the period of limitation prescribed under Section 107(4) of the Act.