Facts of the Case

The petitioner, M/s Ariskon Pharma Pvt. Ltd., Patna, challenged the cancellation of its GST registration vide order dated 04.08.2021, and the subsequent dismissal, on grounds of delay, of its appeal against that order. Since the Bihar Goods and Services Tax Tribunal had not been constituted, the petitioner had no further statutory remedy. The cancellation order was passed in Form GST REG-19, which contains a specific column for assigning reasons for cancellation, but the Assessing Officer left this blank, apparently on the belief that if the assessee does not appear or file an objection, no reasons need be recorded.

Issues Involved

  1. Whether a GST registration cancellation order that fails to state any reason, or even refer to the subject matter of the underlying notice, is sustainable merely because it was passed in the prescribed Form GST REG-19.
  2. What recourse remained available to the petitioner given the subsequent amnesty notification permitting revocation applications for certain categories of cancellation.

Petitioner's Arguments

  • The impugned cancellation order was a non-speaking order — it did not state any reason for cancellation and did not even refer to the subject of the underlying show cause notice.

Respondent's Arguments

  • The Assessing Officer had adopted Form GST REG-19, the prescribed statutory form, for passing the cancellation order.

Court Order / Findings

  • On examining the impugned order, the Court found no reason stated for the cancellation, and observed that Form GST REG-19 itself has a specific column where reasons must be assigned — the Assessing Officer appeared to labour under the mistaken belief that non-appearance of the assessee dispensed with this requirement.
  • Relying on a Division Bench ruling in Manoj Kumar Sah vs. The State of Bihar (CWJC No. 18307 of 2022), which held that an order visiting civil and penal consequences must at least refer to the show cause notice and the response thereto, failing which it is non-speaking, cryptic, and violative of natural justice, the Court found the impugned order suffered from the identical illegality.
  • The Court set aside the cancellation order dated 04.08.2021 and directed reconsideration of the issue, since the order failed to record any reason for cancellation despite the mandatory format requiring it.
  • The Court also flagged Notification No.3 of 2023, which allows registered persons whose registration was cancelled under Section 29(2)(b) or (c) to apply for revocation up to 30.06.2023, on filing returns and paying tax, interest, penalty and late fee up to the effective date of cancellation.

Important Clarification

A GST registration cancellation order passed in Form GST REG-19 must actually record reasons in the column provided for that purpose — an officer cannot treat the assessee's non-appearance or failure to file objections as excusing the statutory requirement to state reasons; an order that neither states reasons nor even refers to the subject of the show cause notice is non-speaking, cryptic, and liable to be set aside as violative of natural justice, given the civil and penal consequences that flow from cancellation.

Sections Involved

  • Form GST REG-19, Bihar Goods and Services Tax Rules, 2017 – the prescribed cancellation order form, containing a mandatory column for recording reasons for cancellation.
  • Section 29(2)(b) and (c), Bihar Goods and Services Tax Act, 2017 – grounds of cancellation (non-filing of returns) covered by the amnesty Notification No.3 of 2023 for revocation applications up to 30.06.2023.

Decision – In Favour of

The writ petition was allowed and the cancellation order set aside for reconsideration — the outcome favours the Assessee.

Case Details

Court: High Court of Judicature at Patna
Case No.: Civil Writ Jurisdiction Case No. 3577 of 2023
Coram: Hon'ble the Chief Justice K. Vinod Chandran and Hon'ble Mr. Justice Madhuresh Prasad
Date of Order: 09.05.2023

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