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2024 DIGILAW 741 (GUJ)

Sajid Faridmohammed Rollwala v. Superintendent

2024-04-03

BHARGAV D.KARIA, NIRAL R.MEHTA

body2024
ORDER : 1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 25.1.2024 passed by the Commissioner (Appeals), Central GST, Appeal Commissionerate, Ahmedabad and the order dated 11.3.2020 passed by the Superintendent, Ghatak 16 under Section 29(2) of the Central Goods and Service Tax Act, 2017 (for short ‘the Act’) whereby the registration of the petitioner has been cancelled. 2. Brief facts of the case can be stated as under: 2.1 The petitioner is a tour operator and was registered as per the provisions of Section 12 of the Act. The petitioner was granted registration effective from 2.1.2018. 2.2 It is the case of the petitioner that initially, the petitioner has not hired any consultant and thus, the returns could not be filed from January, 2018 onwards. 2.3 A show cause notice dated 12.2.2020 under Rule 22 read with Section 29(2)(c) of the Act was issued to the petitioner to show cause as to why the registration of the petitioner should not be cancelled due to non-filing of return for a continuous period of six months. It is further the case of the petitioner that said show cause notice was received on the portal. However, the petitioner could not respond to the show cause notice and thus, the registration number of the petitioner was cancelled vide order dated 11.3.2022, with effect from the same date. 2.4 The total liability of the tax extended to the tune of Rs. 13,13,725/-. However, during the year 2020, due to the pandemic, the business of the petitioner was severely affected and the petitioner was in a financial crunch and thereby, the Appeal could not be filed within the time provided under Section 107(4) of the Act. However, the Appeal was preferred before the respondent No. 2 on 5.1.2024 under Section 107 of the Act. 2.5 That on 25.1.2024, a personal hearing was granted. The authorized representative on behalf of the petitioner appeared and stated that because of covid pandemic, the dues wee not paid and now, that they have engaged the consultant and would thereby be filing the return regularly. 2.5 That on 25.1.2024, a personal hearing was granted. The authorized representative on behalf of the petitioner appeared and stated that because of covid pandemic, the dues wee not paid and now, that they have engaged the consultant and would thereby be filing the return regularly. It was further pointed out by the petitioner that the petitioner had filed all the outstanding returns from January, 2018 till March, 2020 by paying requisite interest and requisite late fees and all the outstanding dues were paid on 27.1.2024, whereby, in all, a sum of Rs. 26,95,432/- was paid towards the dischargement of entire liability. 2.6 However, the respondent No. 2 vide order dated 25.1.2024 rejected the Appeal on the ground of limitation and thereby, confirmed the order impugned therein. 2.7 Being aggrieved and feeling dissatisfied by aforesaid, the petitioner has approached this Court by way of this petition under Article 226 of the Constitution of India, seeking following reliefs: “(A) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions to quash and set aside order passed by the appellate authority dated 25.1.2024 (at Annexure-F) as well as order dated 11.3.2020 (at Annexure-C) cancelling the registration certificate of the petitioner as well as show cause notice dated 12.2.2020 (at Annexure-B). (B) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions, directing the respondents to forthwith restore the registration certificate of the petitioner. (C) During the pendency and final disposal of the present petition, Your Lordships may be pleased to stay operation, implementation and execution of order passed by the appellate authority dated 25.1.2024 (Annexure-F) as well as the order dated 11.3.2020 (at Annexure-C) cancelling the registration certificate of the petitioner and further be pleased to direct the respondents to forthwith restore the registration certificate of the petitioner. (D) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case.” 3. Heard learned advocate Mr. Hiren Trivedi for the petitioner and learned advocate Mr. Siddharth Dave for the respondents. 4. Learned advocate Mr. (D) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case.” 3. Heard learned advocate Mr. Hiren Trivedi for the petitioner and learned advocate Mr. Siddharth Dave for the respondents. 4. Learned advocate Mr. Hiren Trivedi for the petitioner, while assailing the impugned orders, has made the following submissions: (i) That the order passed by the first authority cancelling the registration is cryptic in nature and thereby, the same deserves to be quashed and set aside. (ii) That the reason for cancellation of registration was non filing of return which was beyond the control of the petitioner. However, the past returns have already been filed and even the total tax liability has been discharged and that no useful purpose would be served by keeping the petitioner out of the goods and service tax regime. Hence, a request was made to this Court to quash and set aside the impugned orders. (iii) To substantiate the aforesaid submissions, learned advocate for the petitioner has placed heavy reliance on the decision of the Coordinate Bench of this Court in the case of M/s. Aggrawal Dyeing and Printing vs. State of Gujarat, (2022) 137 Taxmann.com 332 (Guj.). Relying upon the aforesaid decision, a contention was raised that the show cause notice as well as the order, if any, passed thereon, should be with reasons. However, in the instant case, the impugned order cancelling the registration is one-line order and thereby, same is cryptic in nature. 4.1 By making above submissions, learned advocate for the petitioner urged this Court to allow the petition as prayed for. 5. Per contra, learned advocate Mr. Siddharth Dave for the respondents, while supporting the impugned orders, has made the following submissions: (i) That the show cause notice was duly served upon the petitioner on portal, however, the said show cause notice was never responded and thereby, the impugned show cause notice as well as the order passed thereon cannot be said to be in any way illegal and thereby, a request is made not to entertain the present petition. (ii) That even after passing of the order of cancellation of registration, the petitioner has not bothered to file the Appeal within the stipulated time and the same is filed after a delay of almost 4 years. (ii) That even after passing of the order of cancellation of registration, the petitioner has not bothered to file the Appeal within the stipulated time and the same is filed after a delay of almost 4 years. That in absence of any power to condone such a huge delay, the appellate authority is well justified in rejecting the Appeal on the ground of limitation. 5.1 By making above submissions, learned advocate for the respondents has urged this Court to dismissed the petition. 6. We have heard the learned advocates for the respective parties and have gone through the material produced on record in detail. No other and further submissions have been canvassed by learned advocates for the respective parties, except what are stated herein-above. 7. Having considered the submissions and having perused the material on record, it appears that the order impugned cancelling the registration of the petitioner dated 11.3.2020 is itself passed without assigning any reasons whatsoever in nature. The said order, in our considered opinion, cannot be said to be as per well settled law with regard to the reasons. Our view is fortified by the decision of the Coordinate Bench of this Court in the case of M/s. Aggrawal Dyeing and Printing (supra). Relevant observations of the said decision are reproduced below: “18. Our final conclusion are as under: 18.1. Until the Department is able to develop and upload an appropriate software in the portal which would enable the Department to feed all the necessary information and material particulars in the show cause notice as well as in the final order of cancellation of registration that may be passed, the authority concerned shall issue an appropriate show cause notice containing all the necessary details and information in a physical form and forward the same to the dealer by RPAD. In the same manner, when it comes to passing the final order, the same shall also be passed in a physical form containing all the necessary information and particulars and shall be forwarded to the dealer by RPAD. 18.2 Over a period of time, we have noticed in many matters that the impugned order cancelling the registration of a dealer travels beyond the scope of the show cause notice. 18.2 Over a period of time, we have noticed in many matters that the impugned order cancelling the registration of a dealer travels beyond the scope of the show cause notice. Many times, the dealer is taken by surprise when he gets to read in the order that the authority has relied upon some inspection report or spot visit report etc. If the authority wants to rely upon any particular piece of evidence then it owes a duty to first bring it to the notice of the dealer so that if the dealer has anything to say in that regard, he may do so. Even if the authority wants to rely on any documentary evidence, the dealer should be first put to the notice of such documentary evidence and only thereafter, it may be looked into. 18.3 The aforesaid may appear to be very trivial issues but, it assumes importance in reducing the unnecessary litigation. Our concern is that on account of procedural lapses, the High Court should not be flooded with writ applications. The procedural aspects should be looked into by the authority concerned very scrupulously and diligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department. 19. In the result, all the writ applications deserve to be allowed solely on the ground of violation of principles of natural justice and, accordingly, the writ applications are allowed. We quash and set aside the respective show cause notices of all the writ applications, seeking cancellation of registration as well as the consequential respective impugned orders cancelling registration with liberty to the respondent No. 2 to issue fresh notice with particulars of reasons incorporated with details and thereafter to provide reasonable opportunity of hearing to the writ applicants, and to pass appropriate speaking orders on merits. It is needless to mention that it shall be open for the writ applicants to respond to such notices by filing objections/reply with necessary documents, if relied upon. We clarify that we have not gone into merits of the case.” 8. It is needless to mention that it shall be open for the writ applicants to respond to such notices by filing objections/reply with necessary documents, if relied upon. We clarify that we have not gone into merits of the case.” 8. Considering the aforesaid ratio laid down by this Court and keeping in mind the facts of the present case, we are unable to take a different view as that of the view taken by the Coordinate Bench of this Court in the case of M/s. Aggrawal Dyeing and Printing (supra). 9. As the Appellate Authority has dismissed the appeals of the petitioner, the respondent authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore, the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly, the matter is remanded back to the Assessing Officer at the show cause notice stage. However, the registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer as per the following directions: (i) The Assessing Officer shall provide detailed reason for cancellation of registration of the petitioner, if not supplied earlier within a period of two weeks from today i.e. on or before 18.03.2024. (ii) Even if the reasons are supplied earlier and if the petitioner requests for the same, the respondent - authorities shall again provide a copy of the reasons for cancellation of the registration upon such request within the aforesaid period. (iii) The petitioner shall file written reply upon receipt of the detailed reasons for issuance of the show-cause notice for cancellation of registration within a period of two weeks from the date of receipt of the reasons. (iv) After receipt of the reply from the petitioner, the respondent authorities shall pass appropriate order in accordance with law after providing opportunity of personal hearing to the petitioner and after considering the reply of the petitioner within a period of four weeks from the date of personal hearing. (v) The aforesaid timeline shall be followed by both the sides. The petitioner shall also co-operate with the respondent-authorities in compliance of the aforesaid time-line for disposal of the show-cause notice by the respondent authorities. 10. (v) The aforesaid timeline shall be followed by both the sides. The petitioner shall also co-operate with the respondent-authorities in compliance of the aforesaid time-line for disposal of the show-cause notice by the respondent authorities. 10. In view of the above, the petition is allowed in part by quashing and setting aside the impugned order passed by the Appellate Authority and remanding the matter back to the Assessing Officer at show-cause notice stage and the registration number of the petitioner shall remain suspended till such show cause notice is disposed of as per the directions given above. 11. It is clarified that this Court has not gone into the merits of the matter. The respondent-authorities shall pass appropriate order in accordance with law after giving detailed reasons to the petitioner and after providing opportunity of hearing to the petitioner. 13. This petition is accordingly disposed of at this stage with liberty to revive in case of difficulty and with the hope that timeline proposed in this order shall be adhered to by both the sides.