Case Law Details
Genius Ortho Industries Vs Union of India And 2 Others (Allahabad High Court)
Allahabad High Court recently ruled on the appeal filed by Genius Ortho Industries against an earlier decision dismissing its writ petition regarding the cancellation of GST registration. Initially, the court condoned a 40-day delay in filing the appeal based on an application under Section 5 of the Limitation Act, as there was no contest from the respondent’s counsel. The core issue stemmed from a decision made on February 29, 2024, by a learned Single Judge, who had dismissed the writ petition due to alleged suppression of material facts by the appellant.
The dismissal followed the cancellation of the appellant’s GST registration by the Superintendent of Ghaziabad on December 19, 2022, and the rejection of its subsequent appeal by the Joint Commissioner (Appeals) on February 27, 2023. When the matter was reviewed by the court, the appellant had failed to disclose the acquisition of a new GST registration following the cancellation, leading the Single Judge to conclude that this omission was significant and misleading. Consequently, the court ordered the department to verify the appellant’s premises, but deemed that the failure to disclose the new registration constituted an attempt to deceive the court.
During the appeal, the appellant’s counsel argued that the dismissal was unjustified, stating that the fact of obtaining a new GST registration did not materially affect the case’s merits. They referenced previous Supreme Court rulings to support the position that suppression of material facts must be relevant to the determination of the case at hand. Conversely, the respondents contended that the failure to disclose the new registration was indeed a material fact that warranted the dismissal of the petition.
After reviewing the arguments and the circumstances of the case, the Allahabad High Court found that the omission regarding the new registration did not constitute suppression of a material fact as defined by relevant legal standards. The court noted that the new registration’s disclosure would not have influenced the maintainability of the petition. Thus, the earlier order dismissing the writ petition was set aside, and the case was remanded to the learned Single Judge for a merit-based reconsideration.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. The office is reported the appeal as barred by 40 days.
2. For the reasons indicated in the application filed under Section 5 of the Limitation Act supported by affidavit, which is not being contested by learned counsel appearing for the respondent, the same is allowed.
3. Delay in filing the appeal is condoned.
Order on Appeal:
1. Heard learned counsel for the parties.
2. This appeal is directed against order dated 29.02.2024, passed by learned Single Judge in Writ Tax No. 542 of 2023, whereby the writ petition, filed by the appellant, has been dismissed on the ground of suppression of material facts.
3. The writ petition was filed by the appellant aggrieved by orders dated 19.12.2022 and 27.02.2023 passed by Superintendent, Ghaziabad, Sector-13 and Joint Commissioner (Appeals) Central GST, Meerut respectively, whereby appellant’s GST registration was cancelled and the appeal filed by the appellant was dismissed.
4. The writ petition was filed on 16.04.2023. When the mater came up before the Court on 22.02.2024, the learned Single Judge was of the view that a further verification was required to be done by the department immediately and accordingly department was directed to visit the premises of the appellant on 23.02.2024 at 11 AM. It was further directed that no further communication was required to be made to the appellant and ordered that matter be listed on 29.02.2024.
5. When the matter came up before the Court on 29.02.2024, it was submitted on behalf of counsel for the respondents that there has been suppression of material fact as the appellant had not revealed before the Court that a new registration was obtained by it subsequent to cancellation of the earlier registration. On the said submissions, learned Single Judge was of the view that having obtained a new registration was a material fact that should have been brought into the knowledge of the Court and the Court was hoodwinked by the appellant in passing an order for verification of the premises by the Authorities. It was also observed that neither was there any averment in the writ petition nor the counsel informed the Court that a new registration has been obtained, which resulted in sheer wastage of time of the Authorities in carrying out the verification and after referring to judgment in Bhriguram De Vs. State of West Bengal and others : (2018) SCC OnLine Cal 8141, dismissed the writ petition on the ground of suppression of material facts.
6. Learned counsel for the appellant made vehement submissions that learned Single Judge was not justified in dismissing the writ petition on the ground of suppression of material fact. Further submissions have been made that for dismissing the petition on the ground of suppression, it was required of the Court to indicate as to how the said fact, which is alleged to have been suppressed was material and would have implication on the maintainability of the petition. As nothing has been indicated in the order impugned, the same deserves to be set aside. It was emphasized that there was no restriction in obtaining a fresh GST registration under the law and that it cannot be said that on account of obtaining the fresh GST registration, the cause of action qua the orders impugned came to an end and therefore, the order impugned deserves to be set aside. Reliance was placed on Arunima Baruah Vs. Union of India and others: (2007) 6 SCC 120 and The Commissioner, Central Excise and Customs and another Vs. M/s Reliance Industries Limited : Civil Appeal No. 6033 of 2009, decided on 04.07.2023 by Hon’ble Supreme Court.
7. Learned counsel for the respondent submits that the cancellation took place on 19.12.2023 and new registration was obtained on 05.03.2023. The appeal was rejected on 27.03.2023 and the writ petition was filed on 16.04.2023. However, the fact of having obtained a fresh registration was not disclosed before the Court. Further, the order passed by learned Single Judge seeking verification was passed on 22.02.2024. Even till that time, the fact was not brought to the notice of the Court, which clearly amounts to suppression of material fact and therefore, the learned Single Judge was justified in dismissing the petition. Further submissions have been made that on merit also, the appellant has no case and therefore, no interference is required in the order impugned.
8. We have considered the submissions made by learned counsel for the parties and perused the material available on record.
9. It is not in dispute that the petition, which was filed seeking to question the cancellation of GST registration and the appellate order, the fact that even before the appeal was decided by the Authorities, the fresh registration had been obtained, was not disclosed/averred in the petition. The plea raised is that the said aspect, was not material for the decision of the subject matter of the case, i.e. the orders of cancellation passed and upheld in appeal.
10. Hon’ble Supreme Court, in the case of Arunima Baruah (supra), inter alia, laid down as under:
“It is trite law that so as to enable the court to refuse to exercise its discretionary jurisdiction suppression must be of material fact. What would be a material fact, suppression whereof would disentitle the appellant to obtain a discretionary relief, would depend upon the facts and circumstances of each case. Material fact would mean material for the purpose of deterimination of the lis, the logical corollary whereof would be that whether the same was material for grant or denial of the relief. If the fact suppressed is not material for determination of the lis between the parties, the court may not refuse to exercise its discretionary jurisdiction. It is also trite that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands. But even if the said dirt is removed and the hands become clean, whether the relief would still be denied is the question.”
11. Hon’ble Supreme Court observed that to enable the Court to refuse to exercise its discretionary jurisdiction, the suppression must be of material fact and it has been further indicated that material fact would mean material for the purpose of determination of lis, the logical corollary whereof would be that whether the same was material for grant or denial of the relief.
12. In the present case, though learned Single Judge has observed that having obtained a new registration was a material fact, as to what was its effect on the lis and whether the same was material for grant or denial of the relief, has not been indicated.
13. It appears that learned Single Judge was of the opinion that in case, the said fact was brought to the notice of the Court, the order dated 22.02.2024 ordering for the verification of premises by the Authorities would not have been passed. Though it is no doubt true that the above fact of a fresh registration was relevant in view of the order of verification passed by the learned Single Judge, the fact of said registration cannot be said to be material so as to affect the determination of the lis between the parties.
14. Learned counsel for the respondent failed to point out that in case, the fresh registration was disclosed, the same would have affected the maintainability of the petition and/or the said aspect was in any manner material for determination of the lis between the parties. As observed, learned Single Judge also, made reference to passing of the order dated 22.02.2024 for verification as the result of the said suppression, which in our opinion cannot be termed as suppression of material fact as laid down by Hon’ble Supreme Court.
15. In view of above discussion, the order impugned passed by the learned Single Judge cannot be sustained. The writ petition is allowed. The order dated 29.02.2024, passed in Writ Tax No. 542 of 2023 is set aside and the matter is remanded back to learned Single Judge for deciding the same on merits.
Author Bio
