The Hon’ble High Court of Calcutta vide its order dated 22.09.2022 in the matter of Swarup Ghosh Vs. The Assistant Commissioner of State Tax, Bowbazar Charge & Ors. in M.A.T. No.791 of 2022 With I.A. No.CAN 1 of 2022, set aside the order rejecting application for revocation of cancellation of registration filed by the assessee without considering the vital and material facts.

The petitioner preferred the intra Court appeal before the Hon’ble Court against the order dated 11th May, 2022 passed in W.P.A. No. 7816 of 2022, whereby the writ petition filed by the Appellant challenging the rejection of the revocation application dated 21st March, 2022 and all other earlier proceedings were dismissed on the ground that an appellate remedy is available under the Act.  Being aggrieved of the said order dated 11th May 2022, the appellant has filed the instant appeal.

Facts of the Case: –

  • That in August, 2021 the appellant was issued with first show cause notice on 23rd August, 2021 proposing to cancel the registration on the ground that there is a contravention of Section 29(2)(a) of the West Bengal Goods and Services Tax Act, 2017.
  • The appellant duly filed a reply to the said show cause notice and thereafter, an order of cancellation of registration was passed on 1st September, 2021, which, as per the appellant was without stating any reason.
  • That pursuant to that the appellant filed an application for revocation of the said order of cancellation and by an order dated 03rd November, 2021, the registration was restored.
  • That at that point of time, the appellant proposed to shift his place of business and therefore, filed an application on 3rd November, 2021 for cancellation of registration, along with various documents sought by the Department.
  • However, due to non-submission of Balance Sheet and profit and loss account, the application filed by the appellant for cancellation of registration was rejected by the Authority.
  • That on the same date i.e., on 25th November, 2021, the second notice for cancellation of the registration was issued on the allegation that the appellant had obtained registration by means of fraud and wilful misstatement or suppression of facts. However, no adverse report was annexed to the said show cause notice.
  • That the appellant duly filed the reply to the same on 2nd December, 2021 requesting to provide the necessary documents enabling her to submit appropriate rebuttal.
  • That the authority failed to provide the documents on the date of hearing i.e., 7th December, 2021, however, dropped the proceedings for cancellation of registration.
  • Thereafter, the appellant made a second attempt and filed the application for cancellation of registration once again.
  • Pursuant to which, a show cause notice was issued by the Authority calling upon the appellant to provide various details. The Appellant filed written submissions to said show cause notice on 13th December, 2021 and on 20th December, 2021, the registration was cancelled by an order passed in the midnight.
  • That on 21st December, 2021, once again, the appellant received another show cause notice during midnight for cancellation of registration for contravention of Section 29(2)(a) of the Act. It was stated in the show cause notice that an adverse report is separately attached, however, no such report was there.
  • That the appellant made a representation pointing out non-receipt of adverse report, on 27th December, 2021. Pursuant to which, 28th December, 2021, an adverse report was received.  Therefore, the appellant sent an email at 47 p.m. requesting for time to submit reply.
  • However, without affording an opportunity, the registration was cancelled on the very same date i.e., on 28th December, 2021. That the appellant filed an application for revocation of the said order on 17th January, 2022.  Thereafter, a show cause notice was issued on 16th February, 2022, to which the appellant duly filed a detailed reply on 19th February, 2022.
  • However, the said application for revocation was rejected by an order dated 21st March, 2022 without taking in to consideration grounds raised by the appellant and without providing the proper opportunity.  Being aggrieved of the said order dated 21st March, 2022 and earlier order including show cause notices, the present appeal has been moved by the petitioner.

Held: –

  • That the Hon’ble Court taking the note of the submissions made, facts of the case, found that order passed by the authority rejecting the revocation application is devoid of reasons and none of grounds raised by the appellant has been dealt with.
  • Further it is not clear as to why the department is dragging the appellant for such a long period, i.e., from August, 2021 and if there is any adverse material available with the respondent, then a proper show cause notice should have been given to the appellant. Thereafter, considering the objections of the appellant and affording an opportunity of personal hearing, a speaking order should have been passed.
  • It was found by the Hon’ble Court that it is high time that the Commissioner of Commercial Taxes takes note of the manner in which the subordinate officers have been dealing with cases, more particularly matters concerning cancellation of registration and it would augur well to conduct an orientation programme to enable to the officers to be sensitized as to how and on what manner the proceedings should be initiated and how it should be dealt with and how speaking order should be passed. Since the enactment under which they are functioning is a new enactment, the officers are required to be sensitized on this issue, for which purpose a copy of this order shall be placed before the Commissioner of Commercial Taxes, West Bengal by the learned Government counsel appearing for the respondents.
  • The Hon’ble Court found that there has been total violation of principles of natural justice, the order of rejection of the revocation application is a non-speaking order without considering the vital facts, the Court is inclined to set aside such an order.

The Hon’ble Court with the above findings, allowed the appeal by setting aside the order passed in the Writ petition and the Writ petition was allowed.  Further the order of rejection of the application of revocation dated 21st March, 2021 was also set aside and the matter was remanded back to the original authority with the directions to issue a comprehensive show cause notice to the appellant clearly mentioning the allegations against her, duly supported by documents or other evidence or material and copies of which should be provided with the show cause notice.  The authority would grant 15 days’ time to submit reply and thereafter, providing an opportunity of personal hearing and considering the submissions made, pass a speaking order on merit and in accordance with law.

 

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