LI Network
Published on: October 10, 2023 at 21:59 IST
The Allahabad High Court has stressed the critical role of providing reasons in administrative orders while overturning a decision to cancel a GST registration. The court held that “reasons are the heart and soul” of any order, and an order without adequate reasons is legally flawed.
The case involved the cancellation of the petitioner’s GST registration by the Assistant Commissioner of Sector 25, State Tax, Kanpur Nagar.
The petitioner’s appeal against the cancellation was rejected on the grounds of delay. The petitioner’s counsel argued that the cancellation order violated Section 29 (Cancellation or Suspension of Registration) of the UP Goods and Service Tax Act, 2017.
It was further argued that a quasi-judicial order affecting the parties’ rights under Article 19 of the Indian Constitution cannot be issued without proper consideration. The petitioner’s right to conduct business was revoked without a legal mandate.
In contrast, the State’s counsel justified the registration cancellation by citing the petitioner’s failure to file tax returns and meet its tax obligations. The dismissal of the appeal was justified as it exceeded the prescribed period under Section 107(4) of the Act.
A bench led by Justice Piyush Agrawal found that the cancellation order lacked assigned reasons.
“The order of cancellation is in the teeth of various judgments of this Court as also referred to above. 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.”
The court relied on previous judgments of the Allahabad High Court, particularly the case of Om Prakash Mishra vs. State of U.P. and others. In the case of Om Prakash Mishra, the court emphasized the importance of providing reasons in administrative orders and set aside an order that lacked adequate justification.
Consequently, the court set aside the cancellation order and the consequential order of the first appellate authority, directing the petitioner to respond to the show cause notice.
Case Title: M/S World Solution V. State Of U.P. And 2 Others