Court Quashes Orders for Lack of Personal Hearing and Mandatory DIN Requirement, Awards Costs to Petitioner
In a significant judgment, the Patna High Court has restored the GST registration of M/s Munna Chaudhary, a contractor, setting aside previous orders that cancelled the registration due to procedural lapses and non-compliance with principles of natural justice. The Division Bench, comprising Justices Rajeev Ranjan Prasad and Sunil Dutta Mishra, found that the orders were issued without granting the petitioner a personal hearing and without the mandatory Document Identification Number (DIN), as required under the Central Goods and Services Tax (CGST) Act, 2017.
The petitioner, M/s Munna Chaudhary, had challenged the cancellation of their GST registration, claiming that it was done without proper notice and opportunity for a hearing. The court noted that the authorities failed to fix at least three dates for personal hearing, which is a settled procedure in such matters. The court emphasized that the absence of a DIN on the show cause notice and subsequent orders rendered them invalid, as the requirement for a DIN could not be retrospectively dispensed with by a later circular from the Central Board of Indirect Taxes & Customs (CBIC).
The petitioner had argued that updated returns were filed and late fees paid prior to the issuance of the show cause notice for revocation of cancellation, but these submissions were overlooked by the respondent authorities. The court criticized the authorities for ignoring these filings and for not applying a judicious mind in considering the materials on record.
In its judgment, the court quashed the orders cancelling the GST registration and the rejection of the revocation application, directing the authorities to restore the petitioner's registration immediately. Furthermore, the court awarded costs of Rs. 15,000 to the petitioner for the litigation, highlighting the adverse impact of the authorities' errors on the petitioner's livelihood.
The decision underscores the judiciary's role in ensuring procedural fairness and adherence to statutory requirements in administrative actions affecting citizens' rights.
Bottom line:-
Cancellation of GST Registration - Violation of principles of natural justice - Orders issued without granting personal hearing and without mandatory DIN Number - Registration restored; petitioner awarded costs of Rs. 15,000/-.
Statutory provision(s): Central Goods and Services Tax Act, 2017, Section 75(4)
M/s Munna Chaudhary v. Union of India, (Patna)(DB) : Law Finder Doc id # 2944114
