Cancellation of Registration Without Proper Notice and Hearing is Invalid: High Court
Summary:
- Show Cause Notice Issued: A show cause notice was issued to the assessee for non-filing of returns.
- Cancellation Order Passed: The registration was cancelled without affording proper opportunity to the assessee.
- Violation of Natural Justice: The court held that the cancellation order was vitiated by the violation of principles of natural justice.
Decision:
In favor of the assessee. The cancellation order was quashed and the matter was remanded for fresh consideration.
HIGH COURT OF ALLAHABAD
Aditi Agri Junction
v.
State of U.P.
Pankaj Bhatia, J.
WRIT TAX No. 248 of 2024
DECEMBER 5, 2024
Utkarsh Misra and Abhishek for the Petitioner.
ORDER
1. The present petition has been filed by the petitioner seeking to challenge the order of cancellation dated 10.05.2023 as well as the order dated 06.03.2024 whereby the appeal preferred by the petitioner was dismissed as being beyond limitation.
2. The contention of the counsel for the petitioner is that on 29.03.2023, a show cause notice was sent proposing to cancellation the registration of the petitioner’s firm, reason as disclosed in the said show cause notice was at Serial No.1. “Composition Taxpayer has not filed returns for three consecutive tax periods”.
3. It is argued that the petitioner was called to furnish reply within seven working days and was directed to appear on 12.04.2023 at 11:00. The petitioner could not file a reply and consequent thereto an order dated 10.05.2023 came to be passed holding that registration of the petitioner is liable to be cancelled for the following reasons:-
“Section 29(2)(b)- person paying tax under Section 10 fail to furnish return”
4. Challenging the said order, an appeal was preferred which too has been dismissed as being beyond limitation.
5. The contention of the counsel for the petitioner is that the show cause notice was never received by the petitioner, he further argues that in terms of the circular issued by the respondent, it was incumbent on the department to fix two dates, one for filing the reply and the other for fixing a date for personal hearing which has not been done as is evident from the show cause notice dated 29.03.2023. He further argues that the order impugned has been passed relying upon Section 29(2)(b) whereas there was no such allegation referred to in the show cause notice. The Standing Counsel defends the order by arguing that the petitioner did not file the returns as such, the order of cancellation came to be passed. It is not disputed, however, that two separate dates were not fixed as is evident from the show cause notice.
6. Considering the submissions made at the Bar, prima facie, the circular was referred to in the judgement of this Court in the Mahaveer Trading Company v. Deputy Commissioner State Tax and another; Neutral Citation No.2024:AHC:38820-DB, where also two specific dates were not fixed and the petition was allowed, the said decision squarely applies to the present case also.
7. In the present case, it appears from record that no separate dates were mentioned for filing reply and for hearing, and on the basis of the said defects alone, a prima facie view can be formed that the order suffers from violation of principles of natural justice, as such, the orders dated 10.05.2023 and 06.03.2024 are quashed.
8. The matter is remanded to the Assessing Authority to pass fresh orders in accordance with law after giving an opportunity of hearing and after considering the returns, if any, filed by the petitioner.
9. Petition stands allowed in terms of the said order.