The Hon’ble High Court of Allahabad vide its order dated 22.12.2022 in the matter of M/s Jaiprakash Thekedar Vs. Commissioner, Commissioner Taxes and Another in Writ Tax No. 1511 of 2022, quashed the order cancelling the registration passed on the basis of show cause notice issued without mentioning the date and time of personal hearing. It was found that the proceedings held in pursuance of such show cause notice are illegal, void and nullity in the eyes of law.
The petitioner filed the writ petition before the Hon’ble High Court being aggrieved of the cancellation of its registration under the provisions of UPGST Act, 2017 and the coercive action sought to be taken against the petitioner as a result of cancellation of registration.
- A show cause notice was issued to the petitioner on 31.08.2019 requiring the petitioner to submit reply withing seven working days from the date of service of notice. The notice further mentions that if the petitioner fails to furnish reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex-parte on the basis of available records on merits.
- The said show cause notice was followed by a cancellation order dated 21.09.2019, wherein it was stated that ‘This has reference to your reply dated 10/09/2019 in response to the notice to show cause dated 31/08/2019 whereas no reply to notice to show cause has been submitted. The effective date of cancellation of your registration is 21/09/2019.’ Though, the amount to be paid by the petitioner based on the return filed was mentioned as ‘zero’.
Petitioner’s Submissions: –
- It was submitted on the behalf of the petitioner that the service of notice on the petitioner was not sufficient, as it was not sent by registered post. The uploading of aforesaid notice on the portal is not sufficient in view of technical glitches being faced in respect thereto. To support its stand reliance was placed on the decision of Pushpam Reality and Others Vs. State Tax Officer & Others decided on 04.02.2022.
- Although, the show cause notice mentions that in case the petitioner does not appear on the appointed date and time fixed for personal hearing, ex parte would be passed, but the notice does not specify any date and time and thus, leaving the petitioner in dark about the date and time on which the petitioner had to appear for the personal hearing, which amounts to violation of statutory requirement of hearing to the person against whom action is proposed to be taken for cancellation of registration, and also breach of principles of natural justice.
On the other hand, it was submitted on the behalf of the respondents that the service of notice through common portal is recognized mode of service under Section 169 of the Act, and therefore, no exception can be taken to the mode of service. However, it was not disputed that the show cause notice does not mention date and time on which the petitioner was supposed to appear for personal hearing.
- The Hon’ble Court after considering the submissions made and facts of the case, found that under first proviso to Sub-Section (2) of Section 29 of the Act, the person concerned has to be given an opportunity of hearing.
- Further, Rule 22(1) of the U.P. Goods and Service Tax Rules, 2017 provides that where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29 of the Act, he shall issue a notice to such persons in Form GST REG-17 requiring him to show cause within a period of seven working days from the date of service of such notice as to why such registration be not cancelled.
- Thereafter, the Hon’ble Court on perusal of the show cause notice issued, found that it is quite evident from absence of the date and time on the show cause notice that it was not issued in the prescribed format.
- Further, it is also clear from the prescribed format that the noticee has to be afforded opportunity of personal hearing and for that purpose he has to be informed in advance, the date and time on which hearing will take place.
- It was found by the Hon’ble Court that since in the instant case, the show cause notice does not mention the date and time appointed for personal hearing, therefore, the proceedings held in pursuance thereof are rendered illegal, void and a nullity in the eyes of law.
The Hon’ble Court with the above findings, allowed the writ petition by quashing the impugned order, with liberty to the Revenue to proceed in accordance with law.
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