Reasons are Heart and Soul of any Judicial and Administrative order: Allahabad HC quashes GST Registration Cancellation Order [Read Order]

In a recent ruling, the Allahabad High Court quashes GST registration cancellation order citing the reasons for cancellation is not mentioned in the order.

The bench of Justice Alok Mathur observed that “The reasons are heart and soul of any judicial and administrative order. In absence of the same the order cannot be justified in the eye of law.”

M/S Sunil Kumar Singh Through Shri Sunil Singh, the assessee-petitioner filed the petition and the court entertained the same as the GST tribunal was not functioning in the State of U.P. Pursuant to the Gazette notification of the Central Government dated 14.9.2023.

The assessee challenged the GST registration cancellation order by which the appeal preferred by the assessee has been dismissed by the respondent no.3 as barred by limitation as provided under section 107(4) of the UPGST Act.

The assessee's counsel argued that the petitioner's registration was cancelled under Section 29 without due process on 21.08.2023. He contended the cancellation lacked reasoned assessment, was mechanical, and lacked justification. The counsel added that the appeal's dismissal due to delay had valid reasons unconsidered.

He argued that the quasi-judicial order adversely affecting the petitioner's business rights under Article 19 of the Constitution was made without due consideration, violating both the Act's intent and Article 14.

Citing precedents, he emphasised the cancellation order's lack of reasoning, contrary to the Supreme Court's stance in Whirlpool Corporation vs. Registrar of Trademarks. He seeks the writ petition's approval.

On the contrary, the Standing Counsel upheld the orders, citing initiation of proceedings against the petitioner for non-filing of GST returns and taxes leading to firm registration cancellation. He asserted the appeal's rejection due to exceeding the limitation period under section 107(4) of the GST statute. He urges dismissal of the writ petition.

The High court stated that Rule 23 of the 2017 GST Rules aims to notify the assessee for a chance to file a revocation application, ensuring business continuity without permanent cancellation. The Act and Rules aim to facilitate smooth business operations, as affirmed in M/s Ansari Constructions Vs. Additional Commissioner.

Consequently, the order by the Assistant Commissioner was quashed and directed the assess-petitioner to respond to the show cause notice. Following, the commissioner was ordered to reconsider the matter after hearing the petitioner’s defence.

To Read the full text of the Order CLICK HERE

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