M/S Padmalay Construction Through Its Propriter Amit Warude vs. The State Of Madhya Pradesh

Held

The Court held that both the order of cancellation of registration and the appellate order affirming it were unsustainable. The Court found that the order of cancellation of registration, dated 31.03.2023, was a computer-generated order without application of mind. It determined zero tax, interest, and penalty payable by the petitioner, despite being issued for non-filing of returns. The Court noted that the Appellate Authority had mechanically dismissed the appeal without examining the manner in which the jurisdictional officer had passed the cancellation order. Therefore, the Court allowed the writ petition, set aside both impugned orders, and remanded the matter back to the Assistant Commissioner, State Tax, Burhanpur, to decide the show-cause notice afresh. The petitioner was granted 30 days to file a reply to the show-cause notice, with this being the last opportunity.

Facts

The petitioner, M/s Padmalay Construction, a proprietorship firm registered under the CGST Act, 2017, filed a writ petition challenging the cancellation of its GST registration. The Assistant Commissioner, State Tax, Burhanpur, issued a show-cause notice on 15.01.2023 alleging non-filing of turnover details, which the petitioner failed to reply to. Consequently, the registration was cancelled effective 31.03.2023. The petitioner appealed this order, but failed to appear before the Appellate Authority on multiple hearing dates. The Appellate Authority, vide its order dated 16.10.2024, affirmed the cancellation. The petitioner then approached the High Court.

Key Issues

1. Whether the order of cancellation of registration passed by the Assistant Commissioner, State Tax, Burhanpur, is sustainable in law, considering it determined zero tax liability, interest, and penalty, despite being issued for failure to furnish returns for a continuous period of six months? Petitioner's contention: The petitioner argued that the cancellation order was a non-speaking, computer-generated order lacking application of mind, as it determined zero tax liability. The Appellate Authority also mechanically dismissed the appeal without examining the jurisdictional officer's flawed order. Revenue's contention: The respondents contended that the petitioner failed to submit a reply to the show-cause notice and did not appear for the appeal hearing on three occasions. Therefore, the allegations against the petitioner remained unrebutted, leading to the adverse orders.