Bhupendra Singh vs State Tax Officer
2023 Latest Caselaw 2080 UK

HIGH COURT OF UTTARAKHAND AT NAINITAL


            Writ Petition (M/S) No. 796 of 2023

Bhupendra Singh                            .............Petitioner

                              Versus

State Tax Officer, Haldwani                ...........Respondent


Present:-
             Mr. Piyush Garg, Advocate for the petitioner.
             Mr. Mohit Maulekhi, Brief Holder for the respondent.



                           Judgment


Hon'ble Ravindra Maithani, J. (Oral)

The challenge is made to a show cause notice

for cancellation of GST Registration dated 06.08.2022 as

well as the order dated 23.08.2022, by which, the GST

registration of the petitioner has been cancelled.

2. Heard learned counsel for the parties and

perused the record.

3. The petitioner runs a proprietorship firm under

the name and style of M/S Bhaiji and Company as a

stockiest of RBM, Reta, Bajri, etc. having a place of

business. He is registered under The Uttarakhand/The

Central Goods and Services Tax Act, 2017 ("the Act"), with

registration No. 05AUYPS2644A1ZG.

4. On 06.08.2022, a notice was issued to the

petitioner on the GST portal. It is the case of the

petitioner that the notice was vague. It does not indicate,

as to whom the petitioner should meet? It required the

petitioner to appear before someone on 19.08.2022, which

subsequently was declared as holiday, but the petitioner

was never given any opportunity or any other notice to

appear on any other day. Subsequently, the GST

registration of the petitioner was cancelled on 23.08.2022

without affording him any opportunity of hearing.

5. It is the case of the respondent that the

declared premises of the petitioner was inspected by the

competent authority on 19.07.2022. Prior to it, on

multiple occasions, on various dates, the petitioner was

tried to be contacted through telephone so as to inform

him about inspection of his premises, but he never picked

up the phone; he never returned the phone call. It is also

the case of the respondent that, the petitioner was issued

a notice dated 06.08.2022, as to why the GST registration

may not be cancelled and the petitioner was required to

appear on 19.08.2022.

6. Learned counsel for the petitioner would

submit that there is gross violation of the provisions of

the Act in the instant case. He would refer to Rule 25 of

The Central Goods and Services Tax Rules, 2017 ("the

Rules") to argue that, in fact, inspection of the premises

cannot be done in the absence of the petitioner. Not only

this, it is submitted that the inspection report was

required to be uploaded on the portal, which has never

been done by the respondents.

7. Learned counsel would also submit the

following points in his submissions:-

(i) The GST registration may be cancelled under

Section 29 of the Act, but Section 29(2)

proviso provides that before doing so, an

opportunity of hearing shall be afforded to

such person. He would submit that it has not

been done.

(ii) The impugned order dated 23.08.2022 reveals

as if, the petitioner has given a reply and in

the same document, it has also been recorded

that the petitioner has never given the reply.

8. Learned counsel for the respondent would

submit that telephonically the petitioner was informed.

He would submit that on various dates, on various

occasions, the respondent authority tried to telephonically

contact the petitioner so as to inform the date of

inspection of his premises. But, learned counsel would

submit that the petitioner has never picked up the call,

he never returned the call.

9. Learned State counsel would submit that, in

fact, 19.08.2022 was not holiday. It was subsequently,

declared as holiday. It is also submitted that

communication has been made as per Section 169 of the

Act.

10. Learned counsel for the petitioner would

submit that in the counter affidavit, it is not the case of

the respondent that any e-mail was sent to the petitioner

indicating the date of inspection.

11. A few provisions have been referred to by the

learned counsel for the parties. Rule 25 of the Rules,

provides for physical verification of the business premises

in certain cases, which is as hereunder:-

"25. Physical verification of business premises in certain cases.- Where the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication or due to not opting for Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification."

12. On behalf of the respondent, Rule 8 of the

Rules has been referred to with regard to details of e-mail

address and telephone numbers which reads as

hereunder:-

"8. Application for registration.-- (1) Every person, other than a non-resident taxable person, a person required to deduct tax at source under Section 51, a person required to collect tax at source under Section 52 and a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in Section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) who is liable to be registered under sub-section (1) of Section 25 and every person seeking registration under sub-section (3) of Section 25 (hereafter in this Chapter referred to as "the applicant") shall, before applying for registration, declare his Permanent Account Number, * * * State or Union Territory in Part A of Form GST REG-01 on the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

***

.............................................................................

13. Section 29(2) and Section 169 of the Act have

also been referred to, they reads as hereunder:-

"29. Cancellation or suspension of registration.-- (1) ..................................................................................

2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,--

(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) a person paying tax under Section 10 has not furnished the return for a financial year beyond three months from the due date of furnishing the said return; or

(c) any registered person, other than a person specified in clause (b), has not furnished returns for such continuous tax period as may be prescribed; or

(d) any person who has taken voluntary registration under sub-section (3) of Section 25 has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.

169. Service of notice in certain circumstances.-- (1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:--

(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or

(b) by registered post or speed post or courier with acknowledgment due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or

(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or

(d) by making it available on the common portal; or

(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or

(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.

(2) Every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub-section (1).

(3) When such decision, order, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved."

14. Section 29 of the Act, provides that as to how,

the GST registration may be cancelled. Section 29(2)

proviso categorically provides that, the proper officer shall

not cancel the registration without giving the person an

opportunity of being heard. Reference to Rule 8 has been

made on behalf of the respondent to argue that, in fact,

telephonically the petitioner was tried to be contacted.

Initially, in view of Rule 8, it was required that the person

applying for registration shall furnish details with regard

to his e-mail and mobile number, but the words e-mail

and mobile number have been omitted subsequently.

15. Learned counsel for the respondent also argued

that, in fact, for inspection, no notice is required to be

given to the person, it is a kind of surprise inspection.

16. This argument does not merit acceptance in

view of Rule 25 of the Rules, which provides that

inspection shall be done in the presence of the said

person. The presence of the person may only be secured

by informing him about the intention of the authority to

inspect. The date and time of the inspection should be

given. Once such notice is given and the person does not

appear at the time of inspection, perhaps it may be said

that the substantial compliance of the Rule 25 has been

made. But, merely by making some telephonic call, which

is neither received nor returned, it cannot be said that

this Rule has been complied with. Non-informing the date

and time of the inspection, would definitely vitiates such

inspection.

17. Not only this, even it has not been stated by

the respondents that they have uploaded the inspection

report on the portal. This is one part of the GST.

18. On 06.08.2022, a notice was given by the

respondent to the petitioner, it is Annexure No.2. It is

definitely vague, it require the petitioner to appear before

the undersigned on 19.08.2022 at 12:57. There is no

undersigned. Name and designation have not been

mentioned in the notice. By reading this document, one

cannot ascertain, as to who signed it? It is admitted that

initially 19.08.2022 was not holiday. It was subsequently

declared a holiday. The notification is Annexure No.5 to

the petition. Thereafter, it is not the case of the

respondent that they issued any other notice to the

petitioner of the date when the petitioner could have

appeared before the respondent authority/competent

officer. Simply the order, cancellation of the registration

has been passed on 23.08.2022. It is in non-compliance

of the provision of Section 29(2) proviso, which requires

that such registration may not be cancelled unless the

person has been afforded an opportunity of hearing. The

petitioner has not been afforded an opportunity of hearing

before cancelling his GST registration. In fact, the

impugned order dated 23.08.2022 begins with the

following two lines, "This has reference to your reply

dated 21/08/2022 in response to the notice to show

cause dated 06/08/2022 whereas no reply to notice to

show cause has been submitted." Both these two lines are

self contradictory. The first line speaks that the reply is

received. The second line speaks that no reply is received.

19. For the foregoing reasons, this Court is of the

view that the impunged order dated 23.08.2022 and the

notice dated 06.08.2022 are not in accordance with law.

They deserve to be set aside. Accordingly, the writ petition

deserves to be allowed.

20. The writ petition is allowed.

21. Both, the order dated 23.08.2022, by which,

the GST registration of the petitioner has been cancelled

and the show cause notice dated 06.08.2022, are

quashed.

(Ravindra Maithani, J.) 04.08.2023 Sanjay