The Uttarakhand High Court quashed the Order of cancellation of GST Registration due to the non-providing opportunity of Hearing and remitted the matter back to GST Authority.
The petitioner, Eficaz Project Limited Liability Partnership challenged the cancellation of the GST Registration on the ground that Section 29(2) specifically creates a statutory obligation, that in an eventuality, where the registration is required to be canceled, under either of the modes, i.e. on account of the commission of the default or on account of an application submitted by the registered assessee, the opportunity of hearing is mandatory, required to be provided.
Mr. S.K. Posti, Senior Counsel for the petitioner contended that once he himself as a partner of a partnership firm has submitted an application for cancellation of his GST registration which was filed on 30th May 2020, in that eventuality, under Sub-rule (3) of Rule 22 of the Rules framed under the Act, the decision on the application submitted for the cancellation of the registration was required to be taken by the respondent within a period of 30 days as provided therein. In case, if no decision is taken, within a period of 30 days, in that eventuality, the respondent becomes functus officio, to pass any order on the application which was submitted by the person concerned for cancellation of the registration and hence, any subsequent cancellation of registration after the expiry of the aforesaid period would be without jurisdiction.
Mr. Posti further pointed out that even if at all a decision was required to be taken on an application submitted by the petitioner requesting for the cancellation of the registration, if at all, the decision was required to be taken after the expiry of the period of 30 days, as provided under Sub-rule (3) of Rule 22 of the Rules, in that eventuality too, the implications of Sub-section (2) of Section 29 of the Act, ought to have been followed and the petitioner should have been mandatorily provided with an opportunity of hearing and in the absence of there being any prior show cause issued to the petitioner, calling his explanation, the order of cancellation of his registration would be apparently and statutorily bad in the eyes of law.
The single bench of Justice Sharad Kumar Sharma ruled that even if the impugned order of 12th July 2021, is taken into consideration, there is not even a single whisper that after the expiry of 30 days, as provided under Sub-rule (3) Rule 22, when the cancellation was being resorted to, though apart from the fact that the officer concerned has become functus officio after the expiry of 30 days, even if at all, the cancellation was required, in that eventuality, then the petitioner ought to have been heard.
The court remitted the matter to the respondent to take appropriate action and decision thereon too, only after providing an opportunity of hearing to the petitioner and the decision on the same would be taken within a period of 30 days.
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