2024 (9) TMI 161 - HC - GST

Violation of principles of natural justice - challenge to order of cancellation of registration on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - HELD THAT - In the present matter order of cancellation of registration is passed without giving any reason by the respondent authorities and appeals filed by the petitioners under Section 107 of the GST Act are also dismissed. As the Appellate Authority has dismissed the appeals of the petitioner the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly the matter is remanded back to the Assessing Officer at the show cause notice stage. However the registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer as per the directions imposed. This petition is partly allowed by quashing and setting aside the impugned order passed by the Appellate Authority as well as order of cancellation of registration and the matter is remanded to the Assessing Officer at show-cause notice stage however the registration number of the petitioner shall remain suspended till such show cause notice is disposed of as per the directions given.

Summary

Issues:
Challenge to order of cancellation of registration on grounds of lack of hearing and reasons; Non-compliance with court guidelines on issuance of notices; Appeal dismissal under GST Act; Remand to Assessing Officer with specific directions.

Analysis:
The petitioner challenged the order of cancellation of registration, citing lack of opportunity for a hearing and absence of reasons for cancellation. The petitioner's appeal was dismissed by the Appellate Authority based on a limitation ground. The Court referred to its guidelines in a previous case regarding the issuance of show cause notices and final orders, emphasizing the importance of providing detailed information to the dealer to avoid unnecessary litigation. The Court allowed all writ applications due to a violation of natural justice principles, quashing the show cause notices and cancellation orders, and directing the authorities to issue fresh notices with reasons and provide a hearing opportunity before passing new orders.

Despite the Court's directions, the respondent authorities continued to issue cryptic notices and orders for cancellation of registration without following the prescribed procedure. In the present case, the cancellation order lacked reasons, and the petitioner's appeals under the GST Act were also dismissed. As the Appellate Authority rejected the appeals, the revisional power under section 108 of the GST Act was not available to the respondent authorities. Consequently, the impugned orders were required to be quashed, and the matter was remanded back to the Assessing Officer at the show cause notice stage. The registration of the petitioner was to remain suspended until the show cause notice was decided, with specific timelines and directions provided for the process.

The Court partially allowed the petition by setting aside the impugned orders and remanding the matter to the Assessing Officer. However, the registration of the petitioner would remain suspended until the show cause notice was disposed of as per the specified directions. It was clarified that the Court did not delve into the merits of the case, and the respondent authorities were directed to pass appropriate orders in accordance with the law, providing detailed reasons and a hearing opportunity to the petitioner. The petition was disposed of, with notice discharged and no order as to costs.