Gujarat High Court

Global Power Through Its Prop. ... vs The State Of Gujarat on 11 July, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                        NEUTRAL CITATION




                             C/SCA/2724/2025                                          ORDER DATED: 11/07/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                      R/SPECIAL CIVIL APPLICATION NO. 2724 of 2025

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                       GLOBAL POWER THROUGH ITS PROP. MOHMEDABID MOHMEDHUSEN
                                               LAKHANI
                                                Versus
                                     THE STATE OF GUJARAT & ORS.
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                      Appearance:
                      SAGAR J SHAH(9447) for the Petitioner(s) No. 1
                      MS SHRUNJAL SHAH, AGP 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 : 11/07/2025

                                                             ORAL ORDER

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned advocate Mr.Sagar J. Shah

for the petitioner and learned Assistant

Government Pleader Ms.Shrunjal Shah for the

respondents.

2. By this petition under Article 227 of the

Constitution of India, the petitioner has

challenged the order dated 30th July, 2021

passed by the respondent No.3-Assistant

Commissioner, Ghatak 75, Bhavnagar cancelling

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the GST Registration Certificate of the

petitioner and the order dated 21.11.2024

passed by the respondent No.2-Deputy State Tax

Commissioner, Bhavnagar dismissing the Appeal

filed by the petitioner under Section 107 of

the Gujarat Goods and Services Tax Act, 2017

on ground of limitation.

3. The brief facts of the case are as under :

3.1. The petitioner is engaged in business

of ship material trading by purchasing raw

material from old ships and selling them in

the market and is registered under the

provisions of the Gujarat Goods and Services

Tax Act, 2017 (for short 'the GST Act').

3.2. The respondent No.3 issued a show-

cause notice dated 22.07.2021 for cancellation

of the registration with following reasons :

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"Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax."

3.3. The petitioner was directed to file

the reply within the seven working days and

appear on 30th July, 2021 before the

respondent No.3.

3.4. It appears that the petitioner

submitted reply on 30th July, 2021 online and

without providing any opportunity of hearing,

the respondent-Authority passed an ex-parte

order dated 30th July, 2021 whereby, the

effective date of cancellation of the

registration was stated as 01.07.2017.

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4.1. Learned advocate Mr.Sagar Shah for the

petitioner submitted that the petitioner has

also filed an additional affidavit on 7th

July, 2025 affirmed on 4th July, 2025 which

reads as under :

"2. I state and submit that the petitioner is willing and ready to comply with the legal requirements by filing all the pending statutory returns and is further willing to discharge the liability arising therefrom, including tax, interest, penalty, and late fees, as computed in the calculation report.

3. That the petitioner undertakes to pay the aforesaid amounts, subject to verification and confirmation by the concerned respondent authority, without prejudice to the petitioner's rights and contentions in the present proceedings."

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4.2. It was submitted that in view of the

decision of this Hon'ble Court in case of

M/s. Aggrawal Dyeing & Printing vs. State of

Gujarat reported in (2022) 137 Taxmann.com 332

(Guj.), the respondent-Authority has failed to

give any reason while issuing the show-cause

notice and without considering the reply filed

by the petitioner on 30th July, 2021, the

order of cacellation or registration was

passed.

4.3. It was submitted that the petitioner

could not file the Appeal within the

stipulated time period and therefore, the

Appeal is also dismissed on the ground of

delay.

4.4. It was therefore submitted that as

held by this Court in case of M/s. Aggrawal

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Dyeing (Supra), the matter may be remanded

back to the respondent No.3 to pass a fresh

de-novo order after considering the reply

filed by the petitioner and in view of the

additional affidavit filed by the petitioner

before this Court along with the computation

of tax, interest, penalty, etc., to be paid by

the petitioner as may be directed by the

respondent No.3 in accordance with law.

5. In view of the above submissions, it would

be germane to refer to the guidelines issued

by the Co-ordinate Bench of this Court in the

case of M/s. Aggrawal Dyeing (Supra), which

read as under :

"18. Our final conclusion are as under:

18.1. Until the Department is able to develop and upload an appropriate software in the portal which would

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enable the Department to feed all the necessary information and material particulars in the show cause notice as well as in the final order of cancellation of registration that may be passed, the authority concerned shall issue an appropriate show cause notice containing all the necessary details and information in a physical form and forward the same to the dealer by RPAD.

In the same manner, when it comes to passing the final order, the same shall also be passed in a physical form containing all the necessary information and particulars and shall be forwarded to the dealer by RPAD.

18.2 Over a period of time, we have noticed in many matters that the impugned order cancelling the registration of a dealer travels beyond the scope of the show cause notice. Many times, the dealer is taken by surprise when he gets to read in the order that the authority has relied upon some inspection report or spot visit report

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etc. If the authority wants to rely upon any particular piece of evidence then it owes a duty to first bring it to the notice of the dealer so that if the dealer has anything to say in that regard, he may do so. Even if the authority wants to rely on any documentary evidence, the dealer should be first put to the notice of such documentary evidence and only thereafter, it may be looked into.

18.3 The aforesaid may appear to be very trivial issues but, it assumes importance in reducing the unnecessary litigation. Our concern is that on account of procedural lapses, the High Court should not be flooded with writ applications. The procedural aspects should be looked into by the authority concerned very scrupulously and deligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department.

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

6. The aforesaid judgment was rendered in the

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year 2022. However, in spite of the above

direction issued by this Court, the

respondent-authorities without following such

directions are issuing cryptic notice and

order for cancellation of registration number

of the petitioner.

7. In the present matter, order of

cancellation of registration is passed without

giving any reason by the respondent

authorities, and Appeal filed by the

petitioners under Section 107 of the GST Act

is also dismissed.

8. As the Appellate Authority has dismissed

the Appeals of the petitioner, the respondent-

Authorities will not be able to exercise the

revisional power under section 108 of the GST

Act. Therefore, the impugned order passed by

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the Appellate Authority as well as the order

of cancellation of registration are required

to be quashed and set aside. Accordingly, the

matter is remanded back to the Assessing

Officer at the show-cause notice stage.

However, the registration of the petitioner

shall remain suspended till the show-cause

notice is decided by the Assessing Officer as

per the following directions:

(i) The Assessing Officer shall provide

detail reason for cancellation of

registration of the petitioners, if not

supplied earlier within a period of two

weeks from the date of receipt of copy

of this order.

(ii) Even if the reasons are supplied

earlier and if the petitioner requests

for the same, the respondent-authorities

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shall again provide a copy of the

reasons for cancellation of the

registration upon such request.

(iii) The petitioner shall file written

reply upon receipt of the detail reasons

for issuance of the show-cause notice

for cancellation of registration within

a period of two weeks from the date of

receipt of the reasons.

(iv) After receipt of the reply from the

petitioner, the respondent authorities

shall pass appropriate order in

accordance with law after providing

opportunity of personal hearing to the

petitioner and after considering the

reply of the petitioners within a period

of four weeks from the date of personal

hearing.

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(v) The aforesaid timeline shall be

followed by both the sides. The

petitioner shall also cooperate with the

respondent-authorities in compliance of

the aforesaid timeline for disposal of

the show-cause notice by the respondent

authorities.

9. In view of the above, this petition is

partly allowed by quashing and setting aside