Gujarat High Court

Vraj Traders Through Proprietor Mr. ... vs State Of Gujarat on 28 August, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                             C/SCA/9080/2025                                      ORDER DATED: 28/08/2025

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 9080 of 2025

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                        VRAJ TRADERS THROUGH PROPRIETOR MR. VRAJESH BHIKHUBHAI
                                              PANSURIYA
                                                 Versus
                                        STATE OF GUJARAT & ORS.
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                      Appearance:
                      UCHIT N SHETH(7336) for the Petitioner(s) No. 1
                      MS. SHRUNJAL SHAH, ASSISTANT GOVERNMENT PLEADER for the
                      Respondent(s) No. 1,2,3
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                          CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                                and
                                HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                                                              Date : 28/08/2025

                                               ORAL ORDER

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1 Heard learned advocate Mr.Uchit Sheth for the

petitioner and learned Assistant Government Pleader

Ms.Shrunjal Shah for the respondents. By way of this

petition under Article 226 of the Constitution of India,

the petitioner has approached this Court seeking

following reliefs:

"A. This Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ, or order quashing and setting aside impugned appeal order dated 22.09.2022 (annexed at Annexure A) as well as order dated 16.6.2022 (annexed at Annexure F) and order dated 6.7.2022 (annexed

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at Annexure K) as being wholly without jurisdiction, mechanical and illegal;

B. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order quashing and setting aside impugned notice dated 4.6.2022 (annexed at Annexure F) as being non-speaking, mechanical and illegal;

C. This Hon'ble Court may be pleased to issue writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith restore the registration certificate of the Petitioner under the GST Acts;

D. This Hon'ble Court may be pleased to issue writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to withdraw notices issued to buyers of the Petitioner under Section 73/74 of the GST Acts on the basis of cancellation of registration certificate of the Petitioner;

E. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to restore the registration certificate of the Petitioner under the GST Acts and in any case restrain the Respondents from undertaking further proceedings against buyers of the Petitioner on the basis of the cancellation of registration of the Petitioner;"

2 The brief facts of the case can be stated as

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under:

2.1 The petitioner is a proprietorship concern and

had obtained registration under the provisions of the

State Goods & Service Tax Act,2017 (hereinafter

referred to as 'the Act' for short) on 16.02.2018.

2.2 During the course of registration, the principal

place of business was shown as 2nd Floor, B-228, Sobo

Centre, South Bopal, Gala Gymkhana Road,

Ahmedabad 380058.

2.3 It is the case of the petitioner that the place of

business shown during the registration was a rented

premises. Upon expiry of lease on 09.07.2018, further

extension for the rented premises was granted for a

period of 11 months and 29 days on 11.07.2018. In

the meanwhile, in May 2019, petitioner also started

business at the place bearing address C-1, 1 st Floor,

Shreenath Complex, Zabzarda Chokdi, Junagadh-

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362001. An amendment application was filed under

the provisions of the Act on 01.05.2019 to incorporate

additional place of business in the registration

certificate. The amendment application was approved

by the authority on 25.05.2019.

2.4 It is the case of the petitioner that the Lease

Agreement for the original place of business got

expired in June,2019. The petitioner did not renew

the lease agreement. The petitioner continued to

operate from the premises at Junagadh and validly

continued with the registration under the Act.

2.5 It is the case of the petitioner that the petitioner

inadvertently skipped filing of application for

amendment in Registration Certificate to delete the

place of business at Ahmedabad and make the

premises at Junagadh as the principal place of

business. However, an application was made for

change of name of the petitioner from "Vraj

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Accountancy" to "Vraj Traders" which was allowed by

the respondent authority on 24.12.2019.

2.6 Subsequently, a show-cause notice was issued to

the petitioner on 04.06.2022 proposing to cancel the

Registration Certificate under the provisions of the

Act on the ground that principal place of business was

not found at the time of field visit. The petitioner was

asked to submit his reply to the said show-cause

notice within a period of seven working days from the

date of service of notice failing which, the show-cause

notice shall be adjudicated Ex-parte on basis of

available records. It is the case of the petitioner that

no prior intimation was given to the petitioner before

spot visit despite the fact that E-mail address as well

as mobile phone number of the proprietor were

available with the respondent authorities.

2.7 It is also the case of the petitioner that the

petitioner was traveling abroad from 01.06.2022 to

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13.06.2022, and therefore, could not respond to the

show-cause notice which was issued on 04.06.2022.

Subsequent to the issuance of the show-cause notice,

the respondent authority passed an ex-parte order

dated 16.06.2022 cancelling the Registration

Certificate of the petitioner with effect from

16.02.2018.

2.8 Thereafter, the petitioner applied for revocation

of cancellation certificate. The respondent authority,

issued a show-cause notice dated 20.06.2022 which

was served physically to proprietor of the petitioner,

proposing to reject the revocation application on the

ground that the principal place of business has been

vacated by the petitioner. Reply was filed by the

petitioner on 23.06.2022 giving specific reasons

contending that it was merely a procedural error on

part of the petitioner for not deleting the place of

business at Ahmedabad, as the petitioner has

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continued to operate his business from Junagadh

which has already been corporated in Registration

Certificate of the petitioner. The respondent, by way

of an order dated 06.07.2022, rejected the application

for revocation of cancellation of Registration

Certificate on the ground that no business was

conducted by the petitioner from the principal place

of business, and therefore, Rule 21(a) of the CGST

Rules,2017 have been violated. The petitioner,

thereafter, preferred an appeal before Dy./Addl

Commissioner of Appeals, challenging the

cancellation of Registration Certificate under the

provisions of Sec.107 of the Act. It is the case of the

petitioner that after filing of appeal, no notices

regarding hearing of appeal was issued to the

petitioner. Thereafter, on 25.09.2023, the petitioner

received an e-mail from the appellant authority

stating that the appeal filed by the petitioner has

been rejected on the ground of limitation. It is the

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case of the petitioner that the appeal was filed within

a period of limitation. Therefore, the petitioner

preferred an application dated 04.10.2023 before the

Appellate Authority requesting them to provide a copy

of order rejecting the appeal. On making such

application, the appeal order dated 22.09.2022 was

served to the petitioner physically on 04.10.2023. The

appeal in the impugned order was rejected on merits

and not on the ground of limitation. It is the case of

the petitioner that the Appellate Authority had passed

the impugned order without assigning any reasons

and stating that the order rejecting application for

revocation has found to be proper.

2.9 In view of such facts, petitioner preferred a writ

petition before this Court being Special Civil

Application No.19287 of 2023. As there were some

inadvertent discrepancies in the petition, the same

was withdrawn with a liberty to file fresh petition.

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The order of granting of withdrawal by this Court was

passed on 28.11.2024. In view of such facts, present

writ petition is preferred challenging the Appellate

Order dated 22.09.2022 as well as the order of

dismissal of Revocation Application dated 16.06.2022

as well as order of Cancellation of Registration dated

06.07.2022 (hereinafter referred to as 'the impugned

orders').

3 Heard Mr.Uchit Sheth, learned advocate for the

petitioner and Ms.Shrunjal Shah, learned Assistant

Government Pleader for the respondent authorities.

4 Learned advocate Mr.Uchit Sheth for the

petitioner, while assailing the impugned orders, has

made the following submissions:

4.1 That no hearing was granted to the petitioner

before passing appeal order and also no reasons have

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been assigned for rejecting the submissions of the

petitioner, and therefore, the impugned appeal order

is passed in breach of principles of natural justice.

4.2 Relying on decision of this Court in the case of

Agarwal Dyeing & Printing Works vs. State of

Gujarat., reported in (2022) 107 GSTR 406 (Guj).,

it was submitted that in view of this decision, the

clause of the GST Rules alleged to be breached was

contrary to the facts of the present petition and thus

not applicable in the present case.

4.3 It was submitted that the only error committed

by the petitioner was non-filing of application for

deletion of place of business at Ahmedabad after

expiry of lease period and shifting of business to

Junagadh which, according to the petitioner, was only

a procedural lapse with no tax implication, and

therefore, there was retrospective cancellation of

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registration certificate on the basis of procedural

lapse thereby invalidating all the valid transactions

undertaken by the petitioner on which tax was duly

paid, was wholly without jurisdiction, mechanical and

illegal.

4.4 It was also submitted that Rule 21(a) of the GST

Rules, which has been heavily relied upon by the

authority rejecting revocation of registration, has no

applicability on the petitioner's case, as the said Rule

21(a) applies only to a person who does not conduct

any business from the declared place of business. In

the present case, admittedly, the petitioner did

business from its additional place of business

declared in registration certificate, and therefore,

Rule 21(a) of the GST Rules has no applicability and

rejection of application for revocation of cancellation

of registration therefore is wholly mechanical and

illegal.

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4.5 That rejection of application for revocation on

the additional ground of supply of goods being not

incorporated in the registration certificate was

beyond the show-cause notice issued for cancellation

of registration which is not permissible, and

therefore, such ground is also not tenable under the

law.

4.6 In view of the aforesaid, learned advocate

Mr.Uchit Sheth, submitted that the issuance of show-

cause notice and passing of impugned orders are the

most arbitrary action in gross violation of principles

of natural justice at the end of the respondent

authorities. Learned advocate Mr.Sheth has

vehemently submitted that the present case is

squarely covered by the judgement of this Court in

the case of Agarwal Dyeing and Printing Works

(supra).

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4.7 By making above submissions, learned advocate

Mr.Sheth has requested this Court to allow the

present petition, as prayed for.

5 Per contra, learned Assistant Government

Pleader Ms.Shrunjal Shah for the respondent, though

vehemently opposed the present petition, but could

not dispute the factum with regard to issuance of

show-cause notice dated 04.06.2022 proposing to

cancel the Registration Certificate. Learned AGP

Mr.Sharma, could not dispute the fact that no

material in support of the show-cause notice was

provided to the petitioner. Accordingly, learned AGP

Mr.Sharma has requested this Court to pass

appropriate orders in the interest of justice.

6 We have heard learned advocates appearing on

behalf of the respective parties and have gone

through the material produced on record and have

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also gone through the judgement of this Court in the

case of Agarwal Dyeing and Printing Works

(supra). No other and further submissions have been

canvassed by the learned advocates appearing for the

respective parties.

7 Having considered the judgement delivered by this

Court in the case of Agarwal Dyeing and Printing

Works (supra), in our considered opinion, the

Coordinate Bench of this Court has discussed the law

with regard to show cause notice as well as the

importance of the principles of natural justice in great

detail, which can thus be reproduced as under for the

sake of brevity:

"10. Thus, upon appreciation of the scheme of Act, where specific forms have been prescribed at each stage right from registration, cancellation and revocation of cancellation of registration, the same are to be strictly adhered too. At the same time, it is equally important that the Proper Officer empowered under the said Act adheres to the principles of natural justice.

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11. At the outset, we notice that it is settled legal position of law that reasons are heart and soul of the order and non communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. This Court is bound by the said judgments hereinafter referred to. The necessity of giving reason by a body or authority in support of its decision came for consideration before the Supreme Court in several cases. Initially, the Supreme Court recognized a sort of demarcation between administrative orders and quasi-judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of the Supreme Court in A.K. Kraipak v. Union of India, (1970) 1 SCR 45. The Hon'ble Supreme Court vide judgments in the cases of Ravi Yashwant Bhoir v. District Collector Raigad, (2012) 4 SCC 407, Sant Lal Gupta v. Modern Cooperative Group Housing Society Limited, (2010) 13 SCC 336; Kranti Associates Private Limited v. Masood Ahmed Khan, (2010) 9 SCC 496; Abdul Ghaffar v. State of Bihar, (2008) 3 SCC 258, has expanded the horizon of natural justice and reasons have been treated part of the natural justice. It has gone to the extent in holding that reasons are heart and soul of the order. The absence of reasons renders an order indefensible/unsustainable particularly when it is subject to appeal/revision. It is to be noted that in the case of Kranti Associates v. Masood Ahmed Khan, (2010) 9 SCC 496, the Hon'ble Supreme Court after considering various judgments formulated certain principles which are set out below:

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"a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

b. A quasi-judicial authority must record reasons in support of its conclusions.

c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.

f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

g. Reasons facilitate the process of judicial review by superior Courts.

h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is

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virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice.

i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.

j. Insistence on reason is a requirement for both judicial accountability and transparency.

k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or rubber stamp reasons' is not to be equated with a valid decision making process.

m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny

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(See David David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737);

n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553 at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decision."

o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".

Thus, the position of law that emerges from the decisions mentioned above, is that assignment of reasons is imperative in nature and the speaking order doctrine mandates assigning the reason which is the heart and soul of the decision and said reasons must be the result of independent re-appreciation of evidence adduced and documents produced in the case.

12. At this stage it would be germane to refer to observations made by the Andha Pradesh High Court in the case of MRF Mazdoor Sangh vs. The Commissioner of Labour & Others, reported in

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2014 (3) ALT 265, MANU/AP/1685/2013, wherein the matter of cancellation of registration of trade union, it was held that:

"The show cause notice should reflect the jurisdictional facts based on which the final order is proposed to be passed. The person proceeded against would then have an opportunity to show cause that the authority had erroneously assumed existence of a jurisdictional fact and, since the essential jurisdictional facts do not exist, the authority does not have jurisdiction to decide the other issues."

12.1 We find that the aforesaid observation would squarely apply to the present facts of the case on hand. Thus, the sum and substance of various judgments on the principles of natural justice is to the effect that wherever an order is likely to result in civil consequences, though the statute or provision of law, by itself, does not provide for an opportunity of hearing, the requirement of opportunity of hearing has to be read into the provision.

13. It cannot be disputed that the writ applicant is liable to both civil and penal consequences pursuant to the impugned order of cancellation of certificate of registration. In all the writ applications we could note from the tabular details that the show cause notice though issued in the prescribed form does not elaborate the reasons and the one line reason mentioned is nothing but the reproduction of either of the reasons provide under rules regarding cancellation of registration. It appears from the

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materials on record that the respondent no.2 issued a show-cause notice dated 18th September, 2018 in the Form GST REG-17, calling upon the writ-applicant to show-cause as to why the registration under the GST should not be cancelled. Such notice issued by the respondent no.2 is under Rule 22(1) of the Central Goods and Services Tax Rules, 2017.

13.1 To say the least, the respondent authority i.e. the Assistant/Deputy Commissioner, State tax Officer ought to have atleast incorporated specific details to the contents of the show cause. Any prudent person would fail to respond to such show cause notice bereft of details thereby making the mechanism of issuing show cause notice a mere formality and an eye wash.

14. We further notice that the respondent authority has failed to extend sufficient opportunity of hearing before passing impugned order, inspite of specific request for adjournment sought for. Even the impugned order is not only non speaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Thus, on all counts the respondent authority has failed to adhered to the aforesaid legal position. We therefore, have no hesitation in holding that the basic Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences.

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19. In the result, all the writ applications deserve to be allowed solely on the ground of violation of

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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 Keeping in mind the aforesaid ratio laid down by

this Court as well as keeping in mind the facts of the

present case, it appears that no hearing was granted

to the petitioner before passing the Appellate Order.

Further, the notice proposing cancellation of

registration as well as the impugned order for

revocation application for cancellation of registration

dated 06.07.2022 are without any reasons and in

breach of principles of natural justice as well as in

breach of the ratio laid down by this Court in the case

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