Lakkad Brothers And Co vs State Of Gujarat
2022 Latest Caselaw 9941 Guj

    C/SCA/25205/2022                             JUDGMENT DATED: 09/12/2022




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 25205 of 2022


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE SONIA GOKANI                        sd/-

and
HONOURABLE MRS. JUSTICE MAUNA M. BHATT                     sd/-

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1    Whether Reporters of Local Papers may be allowed                  No
     to see the judgment ?

2    To be referred to the Reporter or not ?                           No

3    Whether their Lordships wish to see the fair copy                 No
     of the judgment ?

4    Whether this case involves a substantial question                 No
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

==========================================================
                       LAKKAD BROTHERS AND CO.
                                Versus
                          STATE OF GUJARAT
==========================================================
Appearance:
MS DIMPAL DAMLE FOR NANAVATI & CO.(7105) for the Petitioner(s) No. 1
for the Respondent(s) No. 2,3
MR TRUPESH KATHIRIYA, LD.ASSTT. GOVERNMENT PLEADER for the
Respondent(s) No. 1
==========================================================

    CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
          And
          HONOURABLE MRS. JUSTICE MAUNA M. BHATT

                             Date : 09/12/2022

                     ORAL JUDGMENT

(PER : HONOURABLE MRS. JUSTICE MAUNA M. BHATT)

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

1. Rule. Mr. Trupesh Kathiriya, learned AGP waives service of

notice of rule on behalf of all respondents.

2. This petition under Article 226 of the Constitution of India,

is filed challenging the show-cause notice dated 02.11.2021, proposing to

cancel the registration as also, the order dated 07.10.2022, cancelling the

registration of the petitioner.

3. Controversy involved in the present petition lies in a very

narrow compass. Considering the controversy involved and with the

consent of the learned advocates for the respective parties, the present

petition is taken up for final hearing today.

4. The petitioner is registered under the provisions of Gujarat

Goods and Services Tax Act, 2017 (GST Act), having Service Tax

Identification Number 24AOKPL8998N1ZT. It is case of the petitioner

that it fulfills all the requirement under the provisions of GST Act. The

petitioner was served with a show-cause Notice dated 02.11.2021, in

Form GST REG-17/31, proposing to cancel the registration. The said

show- cause notice reads as under:

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

"Whereas on the basis of information which has come to my

notice, it appears that your registration is liable to be

cancelled for the following reasons:

"1 In case, Registration has been obtained by means of

fraud, wilful misstatement or suppression of facts."

You are hereby directed to furnish a reply to the notice

within seven working days from the date of service of this

notice.

If you fail to furnish a reply within the stipulated date of fail

to appear for personal hearing on the appointed date and

time, the case will be decided ex parte on the basis of

available records and on merits.

Please note that your registration stands suspended with

effect from 02/11/2021."

5. It is case of the petitioner that barring this two-line reason,

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

no other information was provided to the petitioner. Further, the said

notice was uploaded on portal and nothing further has been received by

the petitioner. As no time or date was mentioned for personal hearing, the

petitioner could not appear or could file any meaningful reply. However,

a short reply was filed stating that the petitioner had obtained Registration

by providing all valid documents that too after following due procedure

under the Act and Rules. However,, an order dated 07.10.2022, was

passed cancelling the registration of the petitioner. In the order of

cancellation of registration, it is recorded that the reply of the petitioner

dated 04.05.2022, has been considered. In the order dated 07 10.2022,

reason given for cancellation of registration, reads as under:

"VALIDITY OF THE TRANSACTIONS CARRIED OUT WAS NOT SUBSTANTIATED BY MEANS OF REPLY FILED"

Aggrieved by the action of respondent No.2 cancelling the

registration, present petition is filed.

6. Heard Ms.Dimpal Damle, learned advocate for the petitioner

and learned AGP Mr.Trupesh Kathiriya for the respondents.

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

7. Learned advocate for the petitioner submitted that the show

cause notice dated 02.11.2021 is vague, cryptic and does not specify the

reason for which the registration of the petitioner is proposed to be

cancelled and therefore, there is clear violation of Principles on Natural

Justice. She further submitted that it is impossible for the petitioner to

respond to such cryptic notice. Moreover, the show cause notice does not

contain any supporting document to substantiate the reason for

cancellation. Vague allegations are made against the petitioner and

thereafter an order dated 7.10.2022 was passed cancelling the registration.

She also contended that the proceedings in this case have been initiated

by the authority who is not competent to do so. Thus, both these orders

dated 02.11.2021 and 07.10.2022, are bad in law and deserves to be

quashed and set aside.

Relying upon the decision of Coordinate Bench in case

of Aggarwal Dyeing and Printing Works vs. State of Gujarat

[2022] 137 Taxmann.com 332 (Gujarat), she submitted that in similar

set of facts, this court has quashed the show-cause notice and the order

cancelling registration. She further submitted that, non-communication of

reasons neither in the show cause notice nor in the order cancelling

registration violates principle of natural justice and therefore also

deserves to be quashed and set aside.

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

8. On the other hand, Mr. Trupesh C. Kathiriya, learned AGP

submitted that the show-cause notice and the order cancelling registration

are in consonance with the provisions of the Act and therefore does not

call for any interference at this stage. However, he could not controvert

the fact that both, the show cause notice and the order cancelling

registration are without reasons.

9. Heard the Ld. Advocates for the respective parties. From the

tenure of the show cause notice dated 02.11. 2021, it is noticed that

specific reasons are not stated as to why the registration of the petitioner

is proposed to be cancelled. Supporting document are also not attached to

justify the reason. Moreover, in the show-cause dated 02.11.2021, though

opportunity granted, no time or date was specified, which in our opinion

reflects non-application of mind by the respondent authority. As held in

the decision of Agarwal Dying (supra), reasons are heart and soul of any

order and non-communication of the same amounts to denial of

reasonable opportunity of hearing, resulting in miscarriage of justice, and

resultantly violates principles of natural justice.

C/SCA/25205/2022 JUDGMENT DATED: 09/12/2022

10. In view of aforestated facts and the reasons, in our opinion,

the show cause notice dated 02.11.2021 and the order of cancellation of

registration dated 07.10.2022, being without reasons are cryptic and

deserves to be quashed and set aside and hereby quashed and set aside.

However, liberty is granted to respondent No.2 to issue fresh notice with

particulars of reasons incorporated with details and thereafter to provide

reasonable opportunity of hearing to the petitioner and to pass appropriate

speaking order on merits, in accordance with law. The concerned

respondent is hereby directed to restore the registration of the petitioner

forthwith.

11. It is needless to mention that it shall be open for the

petitioner to respond to such notice by filing objection/reply with

necessary documents, if relied upon. We clarify that we have not entered

into the merits of the matter. No order as to costs.

sd/-

(SONIA GOKANI, J)

sd/-

(MAUNA M. BHATT,J)

DIPTI PATEL