TMI Blog2024 (2) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... automatically restore the registration of the petitioner, it is made clear that if any Input Tax Credit (ITC) remains unutilized, the petitioner shall not be permitted to utilize the same till the finalization of the show cause proceedings. The Writ Petition stands allowed. - Hon ble Sri Justice P. Sam Koshy And Hon ble Sri Justice N. Tukaramji For the Petitioner : S SURI BABU For the Respondent : Spl Standing Councel for Commercial Taxes ORDER PER HON BLE SRI JUSTICE P.SAM KOSHY Heard Mr. Suri Babu, learned counsel for the petitioner and Mr. K. Bhaskar Reddy, learned Assistant Government Pleader for Commercial Taxes appearing for the respondents. Perused the entire record. 2. The challenge in the present writ petition is to the Order for Cancellation of Registration passed by respondent No.1, dated 11.07.2022, whereby, the GST registration of the petitioner stands cancelled with effect from 11.06.2019. 3. A plain reading of the impugned order dated 11.07.2022 would clearly reflect that there are no reasons mentioned which necessitated the issuance of the Order of Cancellation of Registration. The petitioner, on earlier occasion had filed WP.N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the High Court of Delhi in the case of Kritika Agarwal v. Union of India (W.P.(C) 9424/2023 and CM Nos.36000/2023 36001/2023) and others held as under: in the case of Kritika Agarwal v. Union of India and others, wherein the High Court in the case of cancellation of GST registration had observed that the measure of cancellation of GST must be exercised with circumspection and only in cases, where it is necessary . This in otherwise means that the intention of the Hon ble Delhi High Court by allowing the writ petition was that the authorities concern should take a more pragmatic approach so far as the case where GST registration is concerned and cancellation should not be restored in a mechanical manner or as a matter of routine. Similar decision has also been passed by Division Bench of this Court in W.P.No.36174 of 2022 vide order dated 20.09.2021, where the Division Bench had set-aside the order of the appellate authority and the matter had been remanded back for fresh consideration on its own merits. 8. Recently, there was yet another decision of the High Court of Bombay under similar circumstances in the case of Nirakar Ramchandra Pradhan v. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The impugned order is being passed mechanically and without application of mind is clearly seen as a bare reading of the impugned order. 9. For the aforesaid reasons, the impugned order is required to be held to be illegal and a total nullity. It is well settled principles of law that cancellation of registration certainly meets the assessee with a civil consequence. The petitioner s registration could not have been cancelled without any reason, as no reasons were neither set out in the show cause notice nor set out in the impugned order. The show cause notice and the impugned order suffered from an incurable defect which compels us to exercise the discretionary jurisdiction under Article 226 of the Constitution of India to quash and set aside the show cause notice as also the impugned order based on such illegal show cause notice. 11. According to the respondents, there was a modus operandi on the part of the petitioner to generate and claim fake ITC. If what is stated on behalf of the revenue is to be believed to be correct, in such event, the designated officer should have been more careful and could not have been so careless in issuing such defective show cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized thereafter for discharging future tax liability under the Act and Rule. v. The petitioners shall also pay GST and file the returns for the period subsequent to the cancellation of the registration by declaring the correct value of supplies and payment of GST shall also be in cash. vi. If any Input Tax Credit was earned, it shall be allowed to be utilised only after scrutinising and approving by the respondents or any other competent authority. vii. The respondents may also impose such restrictions / limitation on petitioners as may be warranted to ensure that there is no undue passing of Input Tax Credit pending such exercise and to ensure that there is no violation or an attempt to do bill trading by taking advantage of this order. viii. On payment of tax, penalty and uploading of returns, the registration shall stand revived forthwith. viii. On payment of tax, penalty and uploading of returns, the registration shall stand revived forthwith. ix. The respondents shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow these petitioners to file their returns and to pay the tax/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above facts and circumstances, the impugned order dated 11.07.2022 and the rejection of the revocation of the order dated 26.12.2023 stands set aside/quashed. However, since the impugned orders have been passed without affording any opportunity of hearing to the petitioner, it is ordered that the impugned order dated 11.07.2022 itself be treated as a show cause notice and the petitioner may enter appearance before respondent No.1 and submit a detailed reply on or before 09.02.2024. The petitioner would also be at liberty to submit returns which they have not yet filed along with the late fees on application for delayed submission of returns so that the registration of the petitioner gets restored. Since the matter is being remitted back by this Court, the question of limitation should not come in the way of the petitioner or for the respondents in taking any decision on the claim of the petitioner. 12. Since the setting aside of the order dated 11.07.2022 would automatically restore the registration of the petitioner, it is made clear that if any Input Tax Credit (ITC) remains unutilized, the petitioner shall not be permitted to utilize the same till the finalization of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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