The Hon’ble High Court of Allahabad vide its order dated 23.02.2023 in the matter of M/s Agarwal Construction Company Thru. Sole Proprietor Naresh Kumar Agarwal Vs. Commissioner State Tax and 2 Others in Writ Tax No. 43 of 2023, set aside the order cancelling the registration of the assessee for non-submission of reply to the show cause notice.  It was observed that the order cancelling the registration is non-speaking order and has been passed without stating any reason, moreover, the petitioner was not heard before the passing of order.  Later, the appeal filed by the appellant was also dismissed by the Appellate Authority on the ground of delay.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the order dated 30.07.2022, whereby the GST registration of the petitioner was cancelled as well as the appellate order dated 12.01.2023 dismissing the appeal filed by the Petitioner.

Facts of the Case: –

  • That the petitioner is a sole proprietary of the firm engaged in the business of civil construction work and was registered under GST Act.
  • That the petitioner did not file the GST return and thereafter, a show cause notice dated 18.07.2022 was issued to the petitioner, directing the petitioner to file reply to the notice within seven working days from the date of receipt of notice.

Petitioner’s Submissions: –  

  • It was submitted on the behalf of the petitioner that he was not able to get the copy of show cause notice issued by the respondents and therefore, he could not submit the reply within the time provided.
  • Subsequent to which, an order dated 30.07.2022 was passed, whereby the registration of the petitioner was cancelled. Further, the appeal filed against the said order was also dismissed on the ground of delay.
  • That the order dated 30.07.2022 is self-contradictory as in one line it is stated that petitioner has submitted his reply to the show cause notice dated 18.07.2022 while in the very next line it is noted that petitioner has not submitted reply to the show cause notice.
  • Placing reliance on the decision of this Court in Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others in Writ Tax No.145 of 2022, wherein the Hon’ble Court held that the impugned order does not assign any reason whatsoever for cancelling registration of the petitioner and is passed only on the ground that reply to the show cause notice is not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration’, it was submitted that the petitioner is entitled for benefit of the order passed by this Court in the said writ petition.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case, set aside the order 30.07.2022 & the appellate order dated 12.01.2023, giving an opportunity to the petitioner to appear before the respondent along with the reply to show cause notice and the certified copy of this order and the aforesaid decision in Writ Tax 145 of 2022 dated 26.09.2022.

The Hon’ble Court with the above findings, allowed the writ petition by setting aside the impugned orders, providing an opportunity to the petitioner to appear before the respondent authority.  Further, in case, the petitioner appears along with the reply and the certified copy of this order, the respondents shall proceed to pass a fresh order in accordance with law.

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