Case Law Details
Assaka Powerinfra Pvt. Ltd Vs State of UP And 2 Others (Allahabad High Court)
In Assaka Powerinfra Pvt Ltd vs. State of UP & Others, the petitioner challenged the cancellation of its GST registration, arguing that the suspension and cancellation orders were issued without proper notice or an opportunity for a hearing. The firm’s registration was suspended on 26.08.2022, and later canceled on 17.09.2022. The petitioner contended that the initial notice did not specify a time, date, or venue for response, violating principles of natural justice. The final cancellation order also contradicted itself by acknowledging the petitioner’s reply but then refusing to consider it. The petitioner relied on previous High Court rulings, such as M/s Precitech Engineers vs. State of U.P., which emphasized the necessity of a fair hearing before issuing adverse orders.
The Allahabad High Court found that the cancellation order was issued without due process and in violation of the principles of natural justice. The Standing Counsel for the respondents could not dispute the lack of a hearing opportunity or justify the arbitrary exercise of power. The Court ruled in favor of the petitioner, quashing both the suspension and cancellation orders. The matter was remanded to the relevant authority for reconsideration, with a directive to conduct a fresh hearing and decide the case within three months.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Shubham Agrawal, learned counsel for the petitioner and learned Standing Counsel appearing for respondents.
2. By means of this petition filed under article 226 of the constitution, petitioner has assailed two orders passed by respondent nos. 2 and 3 respectively on 26.08.2022 and 17.09.2022 whereby firstly, the registration of petitioner firm was suspended on 26th August, 2022 and then finally cancelled on 17th September,
3. Submission advanced by learned counsel for the petitioner is that while placing the registration of petitioner firm under suspension, w.e.f., 26th August, 2022, the notice issued to the Director of the firm did not contain any time, date or place where the petitioner may be required to submit his reply or appear for hearing. However, suddenly thereafter on 27th September, 2022, the registration of the firm has come to be cancelled by the order passed by respondent no. 3 wherein surprisingly, while it takes notice of the reply of the petitioner dated 4th September, 2022 but in the very second line it refuses to receive any reply from the petitioner. It is further submitted that cancellation of registration of petitioner firm resulted in serious prejudice to the rights and interest of the petitioner and as such the order, therefore, passed in gross violation of principles of natural justice, is clearly unsustainable. It is submitted that the order itself discloses that no opportunity of hearing was ever provided to the petitioner and the order has been passed in a cursory and mechanical Learned counsel for the petitioner has placed reliance upon a judgment and order dated 4th March, 2023 passed by this Court in Writ Tax No. 1583 of 2022; M/s Precitech Engineers vs. State of U.P. & others, wherein in the relevant paragraphs considering the legal position qua prerequisites for passing a final order having impact of adverse consequences and the requirement of the notice and giving opportunity of hearing all have been discussed, are reproduced hereunder:-
“The Counsel for the petitioner argues that a show cause notice was sent to the petitioner on 26.11.2020 (Annexure no.2) whereby the petitioner was called within a period of seven working days to submit a report and to appear for personal hearing. He further argues that no time and date was fixed for personal hearing. He argues that the petitioner could not file reply which led to the passing of the order dated 09.12.2020. He draws my attention to the order dated 09.12.2020 to argue that the said order is completely non-speaking order. The petitioner preferred an appeal against the said order which too was dismissed on the ground that the same was filed beyond the prescribed period of limitation.
In the light of the said submission, he argues that non-speaking order is neither contemplated under the Act nor does it conform with the Article 14 of the Constitution of India. He argues that in the notice does not specify the time and the date which is arbitrary exercise of power. In support of this, he places reliance upon the judgment of this Court in the case of M/s Jaiprakash Thekedar vs Commissioner, Commercial Taxes and another; [(2023 U.P.T.C. (VOL.113) – 162]. He also relies upon the judgment of this Court in the case of M/s Chandra Sain, Sharda Nagar, Lucknow through its Proprietor Mr. Chandra Sain vs U.O.I. through Secretary Ministry of Finance, New Delhi and others; [2022 U.P.T.C. (VOL.112) -1861].
Considering the fact that the order impugned cancelling the registration is prima facie without application of mind which is squarely covered by the judgment of this court in the case of M/s Chandra Sain (Supra) and the issue of non-fixation of time and date is squarely covered by the judgment rendered in the case of M/s Jaiprakash Thekedar (Supra), the writ petition deserves to be allowed on both the counts. “
4. Learned Standing Counsel could not dispute the aforesaid legal position laid down in order of this Court and also could not demonstrate from the impugned orders as to whether any date, time and place was assigned to hold hearing in the matter. Thus, he does not dispute this fact that final orders were passed in gross violation of principles of natural justice.
5. In view of the above, this petition succeeds and allowed in terms of the order passed by this Court in Writ Tax No. 1583 of 2022; M/s Precitech Engineers vs. State of U.P. & others. The suspension order dated 26th August, 2022 has merged into the order dated 17th September, 2022 passed by respondent no. 3. Accordingly, the order dated 17.09.2022 as well as the order dated 06.08.2024 passed by respondent nos. 2 & 3 respectively are hereby quashed. The matter is remitted to the authority concerned to be decided afresh after giving opportunity of hearing afresh to the petitioner. Appropriate decision shall be taken within a maximum period of three months from the date of production of certified copy of this order.
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