Case Law Details
Neelam Tripathi Vs State of U.P. And 2 Others (Allahabad High Court)
The petitioner challenged the order dated 11 July 2023 passed by the Proper Officer cancelling her GST registration and the subsequent appellate order dated 11 February 2024 upholding the cancellation. The petitioner contended that her previous counsel, without obtaining her consent, had submitted an application in Form GST REG-16 for voluntary cancellation of the registration. She argued that the cancellation was effected without following the mandatory procedure under Rule 22(1) of the Central Goods and Services Tax (CGST) Rules, 2017, which requires issuance of a notice in Form GST REG-17 before cancellation. It was submitted that she came to know about the cancellation only after engaging another lawyer, and upon learning of it, she filed an appeal which was dismissed without due consideration of the facts and records.
The petitioner further asserted that the State authorities themselves admitted in paragraph 8 of their counter affidavit that no notice in Form REG-17 had been issued before accepting the application for cancellation. Hence, the cancellation order was in violation of the mandatory provisions of Rule 22(1). It was contended that once this procedural lapse was admitted, the cancellation based on the so-called voluntary surrender by the previous lawyer could not be sustained in law.
On the other hand, the State counsel supported the impugned orders, arguing that since an application for voluntary surrender had been duly filed on behalf of the dealer and an order passed accordingly, no procedural violation could be alleged.
After hearing both parties and perusing the records, the Allahabad High Court observed that although an application for surrender in Form GST REG-16 had been submitted, it was undisputed that the mandatory notice under Form GST REG-17 had not been issued to the petitioner as required by Rule 22(1) of the CGST Rules. The Court noted that the State’s own counter affidavit confirmed this non-compliance. Holding that the procedural requirement under Rule 22(1) is mandatory, the Court ruled that in the absence of such notice, the cancellation order and the appellate order could not be sustained in law.
Accordingly, both orders—the cancellation dated 11 July 2023 and the appellate order dated 11 February 2024—were set aside. The Court remitted the matter to the Proper Officer with directions to issue a fresh notice within 15 days of receiving a certified copy of the judgment. The petitioner was directed to file her reply within 21 days thereafter, and the officer was instructed to pass a reasoned and speaking order after granting a personal hearing within one month. The writ petition was disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Heard learned counsel for the petitioner and learned standing counsel for the State respondents.
By means of the present writ petitioner the petitioner has challenged the order reference no. ZA0907230758244 dated 11.7.2023 passed by the respondent no.3 and the order dated 11.2.2024 passed in Appeal No. AD0902250605931 by the respondent no.2.
Learned counsel for the petitioner submits that his earlier counsel without any consent of the petitioner applied for voluntarily surrendering the licence in Form REG-16 but without issuing any notice to the petitioner as required in Form GST REG 17 under Rule 22(1) of the CGST Rules, 2017, the order has been passed. He further submits that when the petitioner engaged another lawyer, for the first time came to know that his registration has been cancelled. Immediately thereafter, the petitioner filed an appeal but the same has been dismissed without considering the material on record. He further submits that before accepting the voluntarily surrendering the licence it is incumbent upon the State authorities to issue notice in Form GST REG 17, which has not been done. He further submits that the said fact has been admitted in paragraph no.8 of the counter affidavit. He further submits that once the procedure lapse has been accepted by the State authorities, voluntarily cancellation of the licence by the earlier lawyer cannot be sustained in the eyes of law.
Per contra, learned standing counsel supports the impugned order and submits that once an application has been filed for voluntarily surrendering the licence on behalf of the dealer and the order has been passed, therefore, it cannot be said that any violation has been committed.
After hearing the learned counsel for the parties the Court has perused the record.
It is not in dispute that an application for surrendering the licence in Form REG-16 has been moved but for accepting the same notice as required in Form GST REG 17 under Rule 22(1) of the CGST Rules, 2017 has not been issued to the petitioner. The said fact has been admitted in paragraph no.8 of the counter affidavit. Once it is admitted by the State authorities that Rule 22(1) of the CGST Rules has not been complied with, the impugned orders cannot be sustained in the eyes of law.
The matter requires reconsideration.
In view of the above, the order reference no. ZA0907230758244 dated 11.7.2023 passed by the respondent no.3 and the order dated 11.2.2024 passed in Appeal No. AD0902250605931 by the respondent no.2 are set aside.
The matter is remitted before the respondent no.3 with the direction to issue a fresh notice within 15 days from the date of production of the certified copy of this order. Thereafter the petitioner shall submit his reply within 21 days and a reasoned and speaking order shall be passed after affording personal hearing to the petitioner within the next one month.
The writ petitioner stands disposed of.
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