Case Law Details
Nihal Akhtar Vs Union of India (Patna High Court)
The petitioner is aggrieved with the cancellation of GST registration by order dated 22.04.2022 without assigning any reason. GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.
Central Government has issued GST notification No. 3 of 2023 based on the recommendations of the G.S.T. Council. According to this notification, if a GST registration is canceled due to the failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29of CGST Act, 2017, the registered person has an additional period until 30.06.2023 to apply for GST Registration cancellation invocation. However, certain conditions must be met, including filing the GST returns and making the necessary tax, interest, penalty, and late fee payments for those returns. The assessee can also take advantage of this remedy if the cancellation was done under clause (b) or clause (c) of Sub-section (2) of Section 29.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The petitioner is aggrieved with the cancellation of registration by Annexure- 2 order dated 22.04.2022. An appeal was filed which was delayed, which also stood rejected. Insofar as the Bihar Goods and Services Tax Act is concerned, now there is no Tribunal constituted for the State.
2. In such circumstances, we have looked at the order at Annexure- 2, especially since the learned counsel for the petitioner has argued that it is a non-speaking order. We see from the order that there is no reason stated as to why the cancellation was ordered and not even the subject of the notice is referred to in the order.
3. It is the submission of the learned counsel for the State that the form GST REG- 19 has been adopted by the Assessing
4. We extract form GST REG-19:-
5. As we see from the Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned.
6. We cannot countenance the said order, especially when there is absolutely no reason stated regarding the cancellation of registration.
7. We also notice the judgment of another Hon’ble Division Bench of this Court passed in Manoj Kumar Sah versus The State of Bihar and Anr. in W.J. C. No. 18307 of 2022 wherein it has been stated so:-
” It cannot be disputed that with the passing of the said order, petitioner is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only the order is nonspeaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences. “
8. The impugned order in the instant writ petition also suffers from the very same illegality which has been pointed out by the Division Bench. In such circumstances, we set aside the order at Annexure- 2 and direct reconsideration of the issue.
9. In this context, we also notice that GST notification No. 3 of 2023 has been brought in by the Central Government on the recommendations of the G.S.T. Council wherein if the cancellation has been effected for failure to file returns under clause (b) or clause (c) of Sub-section (2) of Section 29, there is a further period allowed up to 30.06.2023, wherein the registered person can apply for invocation of cancellation. This is also subject to the condition that the return should be filed up to the effective date of cancellation of registration and the payment of tax, interest, penalty and late fee in respect of such returns have also been made. The assessee would also be entitled to avail of the said remedy if the cancellation has been effected under clause (b) or clause (c) of Sub-section (2) of Section 29.
10. The writ petition stands allowed.
