ORDER
1. Heard Ms. Chhaya Gautam, learned counsel for the petitioner and learned ACSC for the State – respondents.
2. The instant writ petition has been filed against the impugned order dated 06.07.2024 passed by the respondent no. 2 as well as the impugned order dated 26.05.2023 passed by the respondent no. 3.
3. Learned counsel for the petitioner submits that one of the partners, i.e., Smt. Pushpa Yadav, was diagnosed with cancer and her husband and son, being the other partners of the firm, were got involved in her treatment and therefore, the business was neglected, which resulted in non-filing of GSTR – 3B & GSTR -1 within the time limit as prescribed under the GST Act. Thereafter, on 12.04.2023, a notice was issued by the respondent no. 3 for cancellation of the registration on the ground that the petitioner has failed to continuously furnish returns for a period of six months. The notice was issued through e-mail and as the other partners were involved in the treatment of Smt. Pushpa Yadav, they could not check e-mail. Thereafter, The respondent no. 3, vide impugned order dated 26.05.2023, cancelled the registration of the petitioner. She further submits that the petitioner deposited the tax in the month of March, 2024 and filed returns till May, 2024 along with late fees and after deposit of tax, along with interest. Thereafter, on-line appeal was preferred on 30.05.2024 before the respondent no. 2, but the appeal of the petitioner has been dismissed vide impugned order dated 06.07.2024 on the ground of limitation.
4. Learned counsel for the petitioner further submits that the registration of the petitioner has been cancelled for the reason of Rule 21-A(2-A) of the Rules, while the notice for cancellation of registration has been issued on the ground that the petitioner has not filed returns continuously for the period of six months. Therefore, admittedly, the order cancelling the registration of the petitioner is beyond the show cause notice. She further submits that the returns were not filed by the petitioner for the last six months, comparison of returns as per Rule 21-A(2-A) is not possible and therefore, the findings recorded in the impugned cancellation order are perverse.
5. She further submits that the petitioner uploaded its GSTR – 3B and GSTR – 1 returns with late fees prior to preferring appeal and therefore, the respondent no. 2 has failed to adjudicate the case on merits. She further submits that once the order has not been passed on merit, the merger will not apply. She further submits that cancellation of registration has serious consequence resulting in serious prejudice to the right and interest of the petitioner. Therefore, passing an order in gross violation of the principles of natural justice is clearly unsustainable in the eyes of law.
6. In support of her submissions, she has relied upon the judgements of this Court in Precitech Enginees v. State of U.P. & Others [MANU/UP/1870/2023] and M/s Assaka Powerinfra Pvt. Ltd. v. State of U.P. [Writ Tax No. 1317/2024, decided on 02.09.2024]. She further submits that once the tax, along with interest as well as returns have been filed, the registration of the petitioner is liable to be restored. In support of her submission, she has relied upon the judgement of this Court in M/s Ennkay Timbers & Another v. State of U.P. & Others [2024 UPTC (116) – 31].
7. Per contra, learned ACSC supports the impugned order and submits that the proceedings have rightly been initiated against the petitioner.
8. After hearing learned counsel for the parties, the Court has perused the record.
9. Admittedly, the notice was given for cancellation of registration on the ground that the returns have not been filed continuously for six months; whereas, the order of cancellation of registration has been passed on a different ground that comparison of return as per Rule 21-A(2-A) is not possible, for which the petitioner was never put to any notice and therefore, the order of cancellation of registration is in gross violation of principles of natural justice, which cannot be sustained in the eyes of law. Further, the appellate court has not passed the order on merit and therefore, merger will not apply.
10. This Court, in Precitech Enginees (supra) has held as under:-
“2. The Counsel for the petitioner argues that a show cause notice was sent to the petitioner on 26.11.2020 (Annexure no.2) whereby the petitioner was called within a period of seven working days to submit a report and to appear for personal hearing. He further argues that no time and date was fixed for personal hearing. He argues that the petitioner could not file reply which led to the passing of the order dated 09.12.2020. He draws my attention to the order dated 09.12.2020 to argue that the said order is completely nonspeaking order. The petitioner preferred an appeal against the said order which too was dismissed on the ground that the same was filed beyond the prescribed period of limitation.
3. In the light of the said submission, he argues that nonspeaking order is neither contemplated under the Act nor does it conform with the Article 14 of the Constitution of India. He argues that in the notice does not specify the time and the date which is arbitrary exercise of power. In support of this, he places reliance upon the judgment of this Court in the case of M/s Jaiprakash Thekedar v. Commissioner, Commercial Taxes and another; [(2023 U.P.T.C. (VOL.113) – 162]. He also relies upon the judgment of this Court in the case of M/s Chandra Sain, Sharda Nagar, Lucknow through its Proprietor Mr. Chandra Sain v. U.O.I. through Secretary Ministry of Finance, New Delhi and others; [2022 U.P.T.C. (VOL.112) -1861].
4. Considering the fact that the order impugned cancelling the registration is prima facie without application of mind which is squarely covered by the judgment of this court in the case of M/s Chandra Sain (supra) and the issue of nonfixation of time and date is squarely covered by the judgment rendered in the case of M/s Jaiprakash Thekedar (supra), the writ petition deserves to be allowed on both the counts.
5. Accordingly, the orders impugned dated 09.12.2020 and 07.12.2022 are set aside. The writ petition is allowed. “
11. Further, in M/s Assaka Powerinfra Pvt. Ltd. (supra), this Court has held as under:-
“3. Submission advanced by learned counsel for the petitioner is that while placing the registration of petitioner firm under suspension, w.e.f., 26th August, 2022, the notice issued to the Director of the firm did not contain any time, date or place where the petitioner may be required to submit his reply or appear for hearing. However, suddenly thereafter on 27th September, 2022, the registration of the firm has come to be cancelled by the order passed by respondent no. 3 wherein surprisingly, while it takes notice of the reply of the petitioner dated 4th September, 2022 but in the very second line it refuses to receive any reply from the petitioner. It is further submitted that cancellation of registration of petitioner firm resulted in serious prejudice to the rights and interest of the petitioner and as such the order, therefore, passed in gross violation of principles of natural justice, is clearly unsustainable. It is submitted that the order itself discloses that no opportunity of hearing was ever provided to the petitioner and the order has been passed in a cursory and mechanical manner. Learned counsel for the petitioner has placed reliance upon a judgment and order dated 4th March, 2023 passed by this Court in Writ Tax No. 1583 of 2022; M/s Precitech Engineers v. State of U.P. & others, wherein in the relevant paragraphs considering the legal position qua prerequisites for passing a final order having impact of adverse consequences and the requirement of the notice and giving opportunity of hearing all have been discussed, are reproduced hereunder:-
“The Counsel for the petitioner argues that a show cause notice was sent to the petitioner on 26.11.2020 (Annexure no.2) whereby the petitioner was called within a period of seven working days to submit a report and to appear for personal hearing. He further argues that no time and date was fixed for personal hearing. He argues that the petitioner could not file reply which led to the passing of the order dated 09.12.2020. He draws my attention to the order dated 09.12.2020 to argue that the said order is completely non-speaking order. The petitioner preferred an appeal against the said order which too was dismissed on the ground that the same was filed beyond the prescribed period of limitation.
In the light of the said submission, he argues that nonspeaking order is neither contemplated under the Act nor does it conform with the Article 14 of the Constitution of India. He argues that in the notice does not specify the time and the date which is arbitrary exercise of power. In support of this, he places reliance upon the judgment of this Court in the case of M/s Jaiprakash Thekedar v. Commissioner, Commercial Taxes and another; [(2023 U.P.T.C. (VOL.113) – 162]. He also relies upon the judgment of this Court in the case of M/s Chandra Sain, Sharda Nagar, Lucknow through its Proprietor Mr. Chandra Sain v. U.O.I. through Secretary Ministry of Finance, New Delhi and others; [2022 U.P.T.C. (VOL.112) -1861].
Considering the fact that the order impugned cancelling the registration is prima facie without application of mind which is squarely covered by the judgment of this court in the case of M/s Chandra Sain (supra) and the issue of non-fixation of time and date is squarely covered by the judgment rendered in the case of M/s Jaiprakash Thekedar (supra), the writ petition deserves to be allowed on both the counts. ”
4. Learned Standing Counsel could not dispute the aforesaid legal position laid down in order of this Court and also could not demonstrate from the impugned orders as to whether any date, time and place was assigned to hold hearing in the matter. Thus, he does not dispute this fact that final orders were passed in gross violation of principles of natural justice.
5. In view of the above, this petition succeeds and allowed in terms of the order passed by this Court in Writ Tax No. 1583 of 2022; M/s Precitech Engineers v. State of U.P. & others. The suspension order dated 26th August, 2022 has merged into the order dated 17th September, 2022 passed by respondent no. 3. Accordingly, the order dated 17.09.2022 as well as the order dated 06.08.2024 passed by respondent nos. 2 & 3 respectively are hereby quashed. The matter is remitted to the authority concerned to be decided afresh after giving opportunity of hearing afresh to the petitioner. Appropriate decision shall be taken within a maximum period of three months from the date of production of certified copy of this order.”
12. In view of the aforesaid facts & circumstances of the case as well as the law laid down by this Court in the above-noted cited case, the impugned order of cancellation of registration of the petitioner dated 26.05.2023 passed by the respondent no. 3 cannot be sustained in the eyes of law. The same is hereby quashed.
13. The writ petition succeeds and is allowed.
14. The authority concerned is directed to restore the registration of the petitioner forthwith on production of a certified copy of this order.