Case Law Details
Saini Engineering And Civil Contractor Vs State of Up And 2 Others (Allahabad High Court)
The case of Saini Engineering And Civil Contractor vs. State of UP And 2 Others, heard in the Allahabad High Court, revolved around a writ petition challenging the cancellation of registration under the Uttar Pradesh Goods and Services Tax Act, 2017 (the Act). The petitioner contested two orders: one for the cancellation of registration dated January 20, 2023, issued by the Assistant Commissioner, and another dated June 15, 2023, issued by the Additional Commissioner (Appeal) GST Office, Bijnor.
The petitioner argued that the cancellation of registration was done without proper application of mind, citing discrepancies in the order’s language and lack of reasoning. The court referred to a Division Bench judgment in Surendra Bahadur Singh v. State of U.P., which emphasized the importance of reasoned orders in administrative and quasi-judicial proceedings. The court highlighted that under Article 19 of the Indian Constitution, the right to run a business is protected, and any adverse action affecting this right must be accompanied by proper reasoning as per Article 14.
The court also referred to the case of Whirlpool Corporation v. Registrar of Trademarks, Mumbai and Ors., where the Supreme Court emphasized the necessity of reasons in administrative or quasi-judicial orders. Additionally, the judgment of Om Prakash Mishra v. State of U.P. & Ors. was cited, emphasizing that reasons are the “heart and soul” of any judicial or administrative order.
The court found that the impugned order lacked reasoning and therefore did not satisfy the requirements of Article 14 of the Constitution. Accordingly, the court set aside both the original order of cancellation and the appellate order. The petitioner was directed to file a reply to the show cause notice within three weeks, and the adjudicating authority was instructed to proceed de novo, granting the petitioner an opportunity to be heard.
The judgment underscored the principle that administrative or quasi-judicial orders affecting rights must be supported by proper reasoning to ensure fairness and compliance with constitutional mandates. The court’s decision in this case reaffirmed the importance of adherence to procedural fairness and the rule of law in administrative actions.
In summary, the Allahabad High Court, in the case of Saini Engineering And Civil Contractor vs. State of UP And 2 Others, set aside the orders cancelling registration under the Uttar Pradesh Goods and Services Tax Act, 2017, due to lack of reasoning, and directed a fresh adjudication with an opportunity for the petitioner to present their case.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the petitioner and Sri Ravi Shankar Pandey, learned Additional Chief Standing Counsel for the State.
2. This is a writ petition under Article 226 of the Constitution of India, wherein the petitioner challenges the order in original for cancellation of registration dated January 20, 2023 passed by the respondent No.2/Assistant Commissioner, (GST) Sector-1, Dhampur Bijnor and the order dated June 15, 2023 passed by the respondent No.3/Additional Commissioner, Grade-II (Appeal) GST Office, Bijnor in appeal under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as “the Act”).
3. Learned counsel appearing on behalf of the petitioner submitted that the order for cancellation of registration has been passed without any application of mind whatsoever and the same is clear from the very first two lines of the order dated January 20, 2023. The relevant part of the said order is quoted below:
“This has reference to your reply dated 12/01/2023 in response to the notice to show cause dated 03/01/2023 Whereas no reply to notice to show cause has been submitted.”
4. Learned counsel appearing on behalf of the petitioner submits that in the first line, the order states that a reply was filed by the petitioner on January 12, 2023 whereas second line records that no reply was submitted. He relies upon a Division Bench judgment of this Court in Writ Tax No.172 of 2023 titled as Surendra Bahadur Singh v. State of U.P. and others decided on August 23, 2023, wherein the Division Bench has held as follows:
“6. Learned counsel for the petitioner argues that although no fault can be found with the appellate order dismissing the appeal as Appellate Authority does not have the power to condone the delay in terms of the scheme of the Act, however, he argues that the order cancelling the registration is without application of mind; he draws my attention to the impugned order dated 07.01.2023, which does not disclose any application of mind. He, thus, argues that the quasi judicial order which has an adverse effect on the right of the petitioner to run business as guaranteed under Article 19 of the Constitution of India, the same has been done without any application of mind which is neither the intent of the Act nor can it be held to be in compliance of the mandate of Article 14 of the Constitution of India. He further argues that as the appeal has not been decided on merit, the doctrine of merger will have no application and it is only the order dated 07.01.2023 which affects the petitioner and as the same is devoid of any reasons, the same can be challenged before this Court as decided by the Hon’ble Supreme Court in the case of Whirlpool Corporation v. Registrar of Trademarks, Mumbai and Ors. – (1998) 8 SCC 1.
7. He further places reliance on the judgment of this Court in the case of Om Prakash Mishra v. State of U.P. & Ors.; Writ Tax No.100 of 2022 decided on 06.09.2022 wherein this Court had recorded that every administrative authority or a quasi judicial authority should necessarily indicate reasons as reasons are heart and soul of any judicial or administrative order.
8. In the present case from the perusal of the order dated 07.01.2023, clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India, as such, the impugned order dated 07.01.2023 (Annexure – 2) is set aside. The petition is accordingly allowed.
9. It is, however, directed that the petitioner shall file reply to the show-cause notice within a period of three weeks from today. The Adjudicating Authority i.e. Assistant Commissioner, Gonda shall proceed to pass fresh order after giving an opportunity of hearing to the petitioner and after considering whatever defence he may take.”
5. Learned counsel for the petitioner further relies upon a coordinate Bench judgment of this Court in Writ Tax No.1476 of 2022 titled as M/s Namo Narayan Singh v. State of U.P. and others decided on October 10, 2023 to emphasis the point that providing of reasons in order is of essence in judicial proceedings.
6. In the present case, the facts are similar to one in Surendra Bahadur Singh’s case (supra), wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh’s case (supra) took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice.
7. In light of the above, I am of the view that the orders impugned herein are liable to be set aside. Accordingly, the order in original dated January 20, 2023 and the appellate order dated June 15, 2023 are quashed and set aside. The petitioner is directed to file its reply to the show cause notice within three weeks from date and the adjudicating authority is directed to proceed de novo and pass order after granting opportunity of hearing to the petitioner.
8. With the above directions, the writ petition is allowed.
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