Bhumia Construction Co. Through Its Propritor Shri Ramesh vs. The State Of Madhya Pradesh

Held

The Court held that the petitioner was indeed provided with an opportunity of hearing, as evidenced by the show cause notice issued on 23/02/2024, followed by the cancellation order on 06/03/2024. The appellate authority's dismissal of the appeal on 22/01/2025 was also on record. However, recognizing the petitioner's desire to re-enter the tax regime and conduct business, and considering it beneficial for the revenue to have the petitioner operating formally and paying regular taxes, the Court decided to set aside the impugned orders. The petitioner was directed to add its bank details to the GST portal as per Rule 10A of the CGST Rules. Upon compliance, the authority was to consider the case for revocation of registration. As a consequence of the default, the petitioner was liable to pay a cost of Rs. 50,000/- to the department, along with pending GST returns. The Court emphasized that this order was passed in the peculiar facts and circumstances of the case.

Facts

The petitioner, Bhumia Construction Co., a registered dealer under the GST Act, failed to add its bank account to the GST portal as required by Rule 10A of the CGST Rules, due to an oversight by its Chartered Accountant. This led to the cancellation of its GST registration by an order dated 06/03/2024. The petitioner's appeal against this cancellation was dismissed by the Joint Commissioner, State Tax, Gwalior Division, via an order dated 22/01/2025, primarily on the grounds of delay. The petitioner then filed a writ petition before the High Court, contending that it was not afforded sufficient opportunity of hearing and that if given a chance, it would rectify the omission and continue its business.

Key Issues

1. Whether the petitioner was denied a sufficient opportunity of hearing before the cancellation of its GST registration, as per the principles of natural justice, turning on the interpretation of the procedures under the CGST Act and Rules. Petitioner's argument: The petitioner contended that it was not given a sufficient opportunity of hearing. Had an opportunity been provided, it could have explained the reasons for not adding the bank account. The petitioner fairly submitted that it would not be prejudiced if granted a chance for revocation of registration and imposition of costs. Revenue's argument: The respondents, State of Madhya Pradesh and others, referred to Sections 25, 29, and 30 of the Central Goods and Services Tax Act, 2017, and Rules 21(a) and (h), 22, and 23 of the Central Goods and Services Tax Rules, 2017. They argued that the petitioner was given sufficient opportunity of hearing and suggested that the petitioner could apply for fresh registration.