Juri Bhuyan Vs Union of India And 3 Ors (Gauhati High Court)
Gauhati High Court held that order cancelling GST registration without providing reasons for cancellation of the same is a non-speaking order. Accordingly, order is liable to be set aside and quashed.
Facts- The petitioner has approached this Court by the instant writ petition, preferred under Article 226 of the Constitution of India, on the premise that her GST Registration under the Central Goods and Services Tax [CGST] Act, 2017 has been cancelled by an Order dated 09.09.2020 pursuant to issuance of a Show Cause Notice dated 27.08.2020. The assail is made inter-alia on the grounds that the manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed by the Proper Officer without due application of mind.
Conclusion- Held that it is implicit in the principles of natural justice and fair play that an adjudicating authority should record reasons as it is part of fair procedure, more particularly, when the decision is likely to affect the right of the person concerned. Recording of reason is also prima facie suggestive of conscious application of mind on the part of the authority. The obligation to record reasons is a possible check against arbitrary action on the part of the adjudicating authority invested with the statutory power to take a decision which is likely to affect the right of the person concerned. When the statute itself contains a prescription to record reasons in the decision, absence of reasons in the decision falls short of the prescription and would be in violation of the prescription and thus, illegal. A look at FORM GST REG-19 also goes to substantiate that the Proper Officer is obligated to record his reason[s] for taking the action of cancellation of GST Registration. Thus, from every standpoint, the impugned Order dated 09.09.2020 is not a speaking order. As such, the impugned Order dated 09.09.2020 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 09.09.2020 cannot stand the scrutiny of law and is liable to be set aside and quashed.
