M/S S.S. Enterprises Lucknow Thru. Its Proprietor Raj Kumar Singh vs. State Of U.P. Thru. Addl. Chief Secy. State Tax Deptt. Lko And 2 Others

Facts

The petitioner, M/s S.S. Enterprises, through its proprietor Raj Kumar Singh, filed a writ petition challenging an order dated January 20, 2022, passed by the Assistant Commissioner, Sector 12, State Tax, Lucknow, which cancelled the petitioner's GST registration. The petitioner also challenged a subsequent order dated December 20, 2023, by which their appeal against the cancellation was dismissed by respondent no. 2 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 reasons, violating Article 14 of the Constitution. They also contended that their appeal was dismissed without considering the detailed reasons provided for the delay.

Held

The Court held that the order dated January 20, 2022, cancelling the petitioner's GST registration, was liable to be quashed. The Court found that no reasons were assigned in the cancellation order, which is contrary to various judgments of the High Court and the Supreme Court. The Court emphasized that reasons are the heart and soul of any judicial and administrative order, and in their absence, the order cannot be justified in the eye of law. The Court also noted that since the appeal was dismissed on the ground of delay, the doctrine of merger would not apply. Citing 'M/s Chandra Sain' and 'Om Prakash Mishra', the Court reiterated that orders passed without application of mind and without assigning reasons violate Article 14 of the Constitution. Consequently, the order dated January 20, 2022, was quashed. The Court directed the petitioner to file a reply to the show cause notice within three weeks, and the Assistant Commissioner was directed to pass a fresh order after providing an opportunity of hearing and considering the petitioner's defense.

Key Issues

1. Whether the order cancelling the petitioner's GST registration dated January 20, 2022, passed by the Assistant Commissioner, is liable to be quashed for being devoid of reasons and passed without application of mind, thereby violating Article 14 of the Constitution of India, as argued by the petitioner, relying on judgments in 'Om Prakash Mishra' and 'M/s Chandra Sain'? 2. Whether the dismissal of the petitioner's appeal by respondent no. 2 on the ground of limitation, without considering the reasons provided for the delay, is sustainable, as argued by the petitioner? The petitioner contended that the cancellation order was passed mechanically, without application of mind, and without assigning any reasons, thus violating Article 19 and Article 14 of the Constitution. They relied on 'Whirlpool Corporation vs. Registrar of Trademarks' and the aforementioned High Court judgments. The revenue supported the impugned orders, arguing that proceedings were initiated due to the petitioner not filing returns and tax, leading to cancellation, and that the appeal was rightly rejected as it was filed beyond the limitation period under Section 107(4) of the Act.