Facts of the Case

The petitioner approached the Uttarakhand High Court by filing WPMS No. 2628 of 2022, challenging proceedings relating to cancellation of GST registration.

The petitioner specifically sought the following reliefs:

  1. Quashing of the show cause notice for cancellation of registration, bearing Reference No. ZA050122006567Z dated 10 January 2022, issued by Respondent No. 1.
  2. Quashing of the order for cancellation of registration, bearing Reference No. ZA050222000251M dated 1 February 2022, issued by Respondent No. 1.
  3. Issuance of a writ of mandamus directing the respondent authorities to revive the petitioner’s GST registration.

The petitioner’s grievance, therefore, arose from the cancellation of its GST registration and the consequential need for restoration or revival of such registration.

The order records that the petitioner relied upon a prior Division Bench judgment of the same High Court in SPA No. 123 of 2022, decided on 20 June 2022, wherein the Court had held that the Commissioner is not an adjudicating authority and, therefore, an appeal under Section 107 of the Uttarakhand GST Act, 2017 would not lie to the Commissioner.

Issues Involved

The principal issues arising from the order were:

  1. Whether the show cause notice dated 10 January 2022 proposing cancellation of GST registration was liable to be quashed.
  2. Whether the GST registration cancellation order dated 1 February 2022 was liable to be quashed.
  3. Whether the petitioner was entitled to revival or restoration of its GST registration.
  4. Whether an appeal under Section 107 of the Uttarakhand GST Act, 2017 could lie to the Commissioner when, according to the Division Bench ruling relied upon by the petitioner, the Commissioner was not an adjudicating authority.
  5. Whether the petitioner could instead approach the State Tax Officer for redressal of grievances and restoration of GST registration.
  6. Whether restoration should be considered liberally where the petitioner pays outstanding GST dues, if any.

Petitioner’s Arguments

The petitioner, represented by learned counsel Mr. Rohit Arora, submitted that the controversy was covered by the Division Bench judgment of the Uttarakhand High Court rendered in SPA No. 123 of 2022 on 20 June 2022.

The petitioner’s principal submission was that:

  • the Division Bench had held that the Commissioner is not an adjudicating authority;
  • consequently, an appeal under Section 107 of the Uttarakhand GST Act, 2017 would not lie to the Commissioner; and
  • in view of the said legal position, the petitioner’s grievance concerning cancellation and restoration of GST registration required appropriate consideration by the competent authority.

The petitioner had also expressly sought judicial intervention for quashing both the cancellation show cause notice and the final cancellation order, together with revival of GST registration.

Respondent’s Arguments

The respondents were represented by learned Brief Holder Mr. Tarun Lakhera.

However, the uploaded order does not record any detailed, separate substantive arguments or counter-contentions advanced on behalf of the respondents. Accordingly, no respondent argument should be inferred, expanded, or attributed beyond what is expressly stated in the judicial order.

Court Order / Findings

The Uttarakhand High Court disposed of the writ petition by granting liberty to the petitioner to approach the concerned State Tax Officer, State Tax, Sector-1, Respondent No. 1.

The Court issued the following material directions:

  • The petitioner was granted liberty to file an application before Respondent No. 1 within ten days, setting out or ventilating its grievances.
  • If the petitioner pays the dues, if any, pending against it under the GST Act, the application for restoration of GST registration may be considered liberally.
  • If such an application is filed, the concerned authority must dispose of it by passing a speaking and reasoned order.
  • Before deciding the application, the petitioner must be afforded a reasonable opportunity of hearing.
  • The application must be disposed of within 30 days of its filing.
  • The pending application before the Court was also disposed of.

Thus, the High Court did not merely leave the petitioner without a remedy; it provided a specific procedural route for seeking restoration before the State Tax Officer and required a reasoned decision after hearing the petitioner.

Important Clarification

A significant clarification emerging from the order is that the High Court relied upon the legal position stated by the petitioner with reference to the Division Bench judgment in SPA No. 123 of 2022 dated 20 June 2022, namely that the Commissioner is not an adjudicating authority and, therefore, an appeal under Section 107 of the Uttarakhand GST Act, 2017 shall not lie to the Commissioner.

The Court accordingly permitted the petitioner to approach the State Tax Officer within ten days.

Another important aspect is that the Court directed that, where the petitioner pays pending GST dues, if any, its restoration application may be considered liberally. This is particularly relevant in GST registration cancellation disputes where continuation of business and tax compliance may depend upon revival of registration.

Further, the Court protected procedural fairness by requiring:

  • a reasonable opportunity of hearing;
  • a speaking order;
  • a reasoned order; and
  • disposal within a defined period of 30 days.

Crucial legal caution: The order does not expressly record a final adjudication quashing the show cause notice or cancellation order on merits. Instead, the writ petition was disposed of with liberty to approach the State Tax Officer in accordance with the directions issued by the Court. This distinction should be preserved while reporting the case.

Section Involved

Section 107 of the Uttarakhand Goods and Services Tax Act, 2017

Section 107 concerns the statutory appellate remedy against decisions or orders passed by an adjudicating authority under the GST law.

In the present matter, the relevance of Section 107 arose because the petitioner relied upon the Division Bench ruling in SPA No. 123 of 2022, under which, as recorded in the present order, the Court had held that the Commissioner is not an adjudicating authority, and therefore an appeal under Section 107 would not lie to the Commissioner.

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783488865_1377compressed.pdf

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