Rejecting Application For Voluntary Cancellation Of GST Registration Without Giving Reasons Is Contrary To Principles Of Natural Justice: Bombay HC
The Bombay High Court observed that the rejection of the application for voluntary cancellation of registration is contrary to the principles of natural justice when it does not contain any reasons.
The Court said that the omission to mention reasons is indicative of non-application of mind.
The Court was hearing a Writ Petition challenging orders whereby the voluntary application for cancellation of registration accepted by the Central Goods and Services Tax (CGST) Authority was revoked, and thereafter, registration was cancelled.
The bench of Justice MS Sonak and Justice Jitendra Jain observed, “the rejection of the application for voluntary cancellation of registration is contrary to the principles of natural justice since it does not contain any reasons, and the omission is indicative of non-application of mind.”
Advocate Sujit Sahoo appeared for the Appellant and Additional GP SD Vyas appeared for the Respondent.
Brief Facts-
In the present case, the Petitioner voluntarily applied to cancel the GST registration and it was granted. However, the CGST Authority revoked the cancellation following orders from an Appellate Authority and rejected the Petitioner’s application for voluntary cancellation. A show cause notice was issued alleging that the registration was obtained through fraud or suppression of facts, and the registration was cancelled retrospectively. The Petitioner objected to the cancellation but the CGST Authorities said that the cancellation was reinstated and then cancelled ab initio based on instructions from the State GST Authorities. The Petitioner’s request for revocation was ultimately rejected.
The Court noted that the GST Form rejecting the application of Petitioner for voluntary cancellation of registration records does not contain any reasons and the space following the phrase “following reason” was left blank.
The Court further observed, “…before the revocation of cancellation of registration, the Petitioner was not supplied with the documents on the basis of which its application for cancellation of registration was rejected, which is contrary to the principles of natural justice.”
The division bench said that since the orders revocating registration cancellation on the Petitioner’s application were passed contrary to the principles of natural justice, all the subsequent proceedings initiated thereafter, which are consequential, also have to be quashed.
Accordingly, the Court quashed and set aside the orders passed by the GST Authorities.
Cause Title: Proprietor Brijesh V. Shah HUF v. The State of Maharashtra (Neutral Citation: 2024:BHC-AS:40347-DB)
Appearance:
Appellant: Advocate Sujit Sahoo
Respondent: Additional GP S. D. Vyas, AGP Dhruti Kapadia, Advocates Ram Ochani and Abhishek R. Mishra
