The Hon’ble High Court of Patna vide its order dated 13.12.2022 in the matter of M/s Avinash Kumar Dhiraj Vs. The State of Bihar Through the Commissioner, Department of State Taxes & Others in Civil Writ Jurisdiction Case No. 15545 of 2022, observing that the assessee would be liable to Both Civil and Penal Consequences, set aside the non-speaking, cryptic order cancelling the registration, as the same was passed without referring to the contents of the show cause notice and the reply filed thereto as well as the reason for the cancellation of registration was not clear therefrom.

The petitioner filed the writ petition before the Hon’ble High Court praying for quashing of ex-parte order dated 20.01.2022 passed by the Joint Commissioner of State Tax, Danapur Circle, District-Patna whereby, the Registration granted under the GST Act, 2017 to the petitioner has been cancelled without giving proper opportunity of filing reply and without giving opportunity of hearing.  Further directions were sought to the respondents to restore the registration of the petitioner firm and de-freeze the bank account of the petitioner firm attached by the respondents as well as not to take any coercive action for recovery of the amount in demand during the pendency of the writ petition.

Held: –

• The Hon’ble High Court after considering the submissions made and facts of the case, found that in the instant matter, the Joint Commissioner of State Taxes, Danapur Circle, Patna vide its order dated 20.01.2022 cancelled the registration of the petitioner under Section 29 of the Bihar Goods and Service Tax Act, 2017.
• The Hon’ble Court on perusal of the impugned order, found that there is not dispute that with the passing of the said order, the petitioner is liable to both civil and penal Consequences.
• Therefore, it was held by the Hon’ble Court that the authority while passing the order ought to have at least referred to the contents of the show cause notice and the reply filed thereto, however, the same was not done in the present case. The order passed is not only non-speaking, but also cryptic in nature and the reason of cancellation is not clear therefrom.  Hence, the order is in violation of Principle of natural justice and needs to be quashed as it involves penal and pecuniary consequences.
• It was found by the Hon’ble Court that the petitioner started the work after the COVID-19 Pandemic and a specific Registration number was allotted to the petitioner on the request made by the petitioner. That in the peculiar facts and circumstances of the case, the authority ought to have condoned the delay in filing the return, preventing cancellation of registration.

The Hon’ble Court with the above findings, allowed the writ petition by quashing the order dated 20.01.2022 passed by the Joint Commissioner of State Taxes, Danapur Circle, Patna and the registration of the petitioner was restored, with a direction to the Respondent Authority namely y The Commissioner, Department of State Taxes, Government of Bihar, Patna to finalize the petitioner’s assessment and/or pass appropriate orders, in accordance with law.  Further, the issue of delay in filing the returns shall remain closed and not raised again.