M/S Shree Traders vs. State Of U.P. And 2 Others

Held

The Court held that the appellate order dated June 23, 2026, could not be sustained as it was not passed in accordance with law and did not consider the contentions raised by the writ petitioner in the correct perspective. The Court noted that an appeal is a statutory valuable right, and the appellate authority has a greater responsibility to consider every aspect of the matter. While the grounds taken might not be tenable, reasons must be provided for the conclusion reached, as reasons are the lifeline of conclusions. When specifically queried, the learned Additional Chief Standing Counsel could not adequately justify the reasons provided in the appellate order. Consequently, the Court found the appellate order to be unsustainable. The writ petition was allowed, the appellate order was set aside, and the matter was remitted back to the appellate authority to decide afresh within two months.

Facts

The writ petitioner, M/S Shree Traders, a proprietorship concern engaged in goods distribution, had its GST registration cancelled on April 4, 2026. A revocation application was filed, and a show cause notice for rejection was issued on May 15, 2026, fixing the hearing for May 26, 2026. However, the order rejecting the revocation application was passed on May 16, 2026, ten days before the scheduled hearing. The petitioner appealed this order on May 21, 2026, but the appeal was rejected by the Additional Commissioner Grade-2 (Appeal), State Tax, Gorakhpur, via an order dated June 23, 2026. The present writ petition challenges these orders.

Key Issues

1. Whether the rejection order dated 16.05.2026, passed prior to the scheduled hearing date of 26.05.2026, without due intimation to the petitioner, violates the principles of natural justice, as argued by the petitioner? 2. Whether the appellate order dated 23.06.2026, which dedicates a significant portion to the contentions of the parties but fails to provide adequate consideration or reasons for rejecting the petitioner's arguments, violates the principles of natural justice, as argued by the petitioner? Petitioner's Arguments: The petitioner contended that the entire procedure followed by both the original authority and the appellate authority was illegal and violated the principles of natural justice. Specifically, the preponement of the hearing date without notice was illegal. Furthermore, the appellate order, despite detailing the parties' contentions, failed to provide reasoned consideration for rejecting the petitioner's arguments, which amounts to a violation of natural justice. The petitioner argued that even if their contentions were not tenable, the authority should have recorded reasons for not considering them in their favour. Revenue's Arguments: The learned Additional Chief Standing Counsel argued that the order passed by the appellate authority is valid in accordance with law and no interference is warranted.