High Court Emphasizes Natural Justice in GST Registration Cancellation Cases

• The case involves a Writ Tax matter in which the Goods and Services Tax (GST) Tribunal is non-functional in Uttar Pradesh due to a Central Government Gazette notification dated 14-9-2023.

• The petitioner is challenging two orders: one from 20-12-2019 by the Assistant Commissioner of Commercial Tax, and another from 27-6-2022 by the Additional Commissioner.

• The petitioner, a proprietorship firm engaged in civil construction works for government departments, had their GST registration canceled on 20-12-2019 following a show cause notice issued on 7-12-2019, to which they did not respond. Their appeal was also rejected on 27-6-2022.

• The petitioner argues that the show cause notice was vague and did not specify a date and time for their appearance before the relevant authority, as required by the law. The impugned order lacked proper reasons, and the appellate authority summarily dismissed the appeal without providing any reasons. Therefore, the petitioner requests that the writ petition be allowed.

• The Additional Chief Standing Counsel supports the impugned order and seeks the dismissal of the writ petition.

• The Court has heard both parties and examined the records.

• Upon reviewing the impugned order, it is clear that it was passed without sufficient reasons for the cancellation of the petitioner's GST registration. The appellate authority also dismissed the appeal without assigning any reasons.

• An order without valid reasons cannot stand. Providing reasons is a fundamental principle of natural justice. This was emphasized in a Supreme Court case, which highlighted that reasons are essential for transparent and fair decision-making.

• The Supreme Court, in another case, emphasized that the High Court should have examined each question raised in the appeal and provided reasons for holding that a question is not a substantial question of law.

• The Supreme Court further stated that "reason is the heartbeat of every conclusion," and absence of reasons renders an order indefensible.

• The Supreme Court in yet another case emphasized that providing reasons in orders is essential in judicial proceedings. Every litigant has a right to know the reasons for the acceptance or rejection of their request, as this is crucial for a meaningful remedy of appeal.

• It is mandatory for the Court or Authority to pass orders while recording reasons in support thereof, even if they are brief, as it is a settled canon of legal jurisprudence.

• Reasoning is critical in judicial proceedings, and it is a statutory requirement of natural justice. Absence of reasoning indicates a whimsical exercise of judicial discretion.

• Reason is the heart of every conclusion, and the absence of reasons makes an order lifeless. Non-recording of reasons violates the principles of natural justice and denies justice.

• The writ petition is allowed, and the impugned orders are set aside.

• The case is remitted back to the first appellate authority, with instructions to pass a fresh, reasoned, and speaking order in accordance with the law. This should be done expeditiously, preferably within two months from the date of the production of a certified copy of this order, after giving reasonable opportunities for hearing to the concerned parties. Namo Narayan Singh Vs. State of U.P.