ORDER

ORAL ORDER

(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

1. Leave to amend the proposed draft amendment to the petition is permitted.

2. By way of the present petition under Article 226 of the Constitution of India, the petitioner is seeking to quash and set aside the order dated 04.07.2019 passed by the Assistant Commissioner, Ghatak 9 (Ahmedabad), Range-3, Division-1 under section 29(2) of the Central Goods and Services Tax Act, 2017 (the Act) and order of cancellation of registration of petitioner company.

3. The petitioner is engaged in providing automation systems in hospitals. The petitioner was registered under section 22 of the GST Act. The principal place of business is at Mumbai. Mr. S Shah was looking after the affairs of the business of the company. From January, 2019 Mr. Shah was unwell and he did not attend the affairs of the business of the company and he passed away. Mr. Shah could not make arrangements to look after the affairs of the petitioner company.

4. The show cause notice dated 24.05.2019, under Rule 22 of the Central Goods and Services Tax Rules, 2017 (“the Rules) in Form GST REG-17 was sent via email.

5. The show cause notice was given on 24.05.2019 under Rule 22 of the Rules. It is the case of the petitioner that in August, 2019 the petitioner company tried to upload the return in Form GSTR-3B of Gujarat. The system was also not permitting the petitioner to opt after December, 2018.

6. The petitioner called the Grievances Cell on 05.08.2019. The representatives of the company were updated about the fact of cancellation of registration number and certificate to that effect from 31.12.2018. The petitioner company was regularly filing the return of income. Mr. S.Shah was looking after the affairs of the company. It was he who was filing the return of the company till December, 2018. He passed away in March, 2019. No person was appointed to look after the affairs of the company. Hence, the show cause notice was issued on 24.05.2019. A responsible person from the company could not look into the email, which went into spam folder. In August, 2019 the staff of the petitioner company tried to upload the return in Form GSTR-3B for the period from 11th January, 2019, which was not being permitted. When he came to know about the cancellation of registration number and certificate with effect from 31.12.2019 and when the spam folder was checked, it was realized that the registration of the company was cancelled. Challenging the revocation under section 13 and cancellation of registration, an application was made. As the period of 30 days had lapsed, it was not allowing to upload the application in terms of Rule 23. The petitioner needed to file return manually, which was not permitted by the common portal. Hence, this application is preferred.

7. Since the appeal had been filed by the petitioner, it was dismissed vide order dated 17.1.22022 on the ground that limitation stated that the appeal is to be filed within 30 days and the same was belated by two years and one month.

8. We have heard Mr.Hiren Trivedi, learned advocate for the petitioner and Ms.Pooja Ashar, learned Assistant Government Pleader for the respondents.

9. On the ground of the order being absolutely cryptic, non-speaking and contrary to the settled position of law, the petition deserves to be allowed.

10. The show cause notice dated 24.05.2019 for cancellation of registrations gives the following reasons:-

“LAST FOR MONTH”

11. The order of cancellation of registration dated 24.05.2019 says this-wise:

“the effective date of cancellation of your registration is 31/12/2018.

Determination of amount payable pursuant to cancellation:

Accordingly, the amount payable by you and the computation and basis thereof is as follows:

The amounts determined as being payable above are without prejudice to any amount that may be found to be payable you on submission of final return furnished by you.

You are required to pay the following amounts on or before 14/07/2019 failing which the amount will be recovered in accordance with the provisions of the Act and Rules made thereunder.”

12. There has been no calculation of the tax also thereafter. This when came to the notice of the petitioner, the time had already lapsed for filing the appeal and as per section 107, since 30 days had already lapsed, the petitioner company could not upload the application on the common portal seeking revocation application in Form GST REG 21 and, manually, it was not permissible. The order of appellate authority has come, which says that the authority, if is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period of three months or six months as the case may be, it can further allow the period of one month to be condoned. However, the appeal was belated by two years and one month and, hence, it is not empowered to condone the delay, even when there is justifiable cause as in the instant case as the person concerned looking after the affairs of the company, had passed away, nobody else was deputed and the email had gone into spam folder.

13. Apt would be to refer to the decision of Agarwal Dying and Printing Works vs. State of Gujarat, (2022) 137 Taxmann.com 332(Gujarat) at this stage. Relevant paragraphs are reproduced as under:

“10. Thus, upon appreciation of the scheme of Act, where specific forms have been prescribed at each stage right from registration, cancellation and revocation of cancellation of registration, the same are to be strictly adhered too. At the same time, it is equally important that the Proper Officer empowered under the said Act adheres to the principles of natural justice.

11. At the outset, we notice that it is settled legal position of law that reasons are heart and soul of the order and non communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. This Court is bound by the said judgments hereinafter referred to. The necessity of giving reason by a body or authority in support of its decision came for consideration before the Supreme Court in several cases. Initially, the Supreme Court recognized a sort of demarcation between administrative orders and quasi-judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of the supreme Court in A.K. Kraipak v. Union of India [1970] 1 SCR 457.

The Hon’ble Supreme Court vide judgments in the cases of Ravi Yashwant Bhoir v. District Collector, Raigad [2012] 4 SCC 407, Sant Lal Gupta v. Modern Cooperative Group Housing Society Ltd. [2010] 13 SCC 336; Kranti Associates (P) Ltd. vs. Masood Ahmed Khan [2010] 9 SCC 496; Abdul Ghaffar vs. State of Bihar [2008] 3 SCC 258, has expanded the horizon of natural justice and reasons have been treated part of the natural justice. It has gone to the extent in holding that reasons are heart and soul of the order. The absence of reasons renders an order indefensible/unsustainable particularly when it is subject to appeal/revision. It is to be noted that in the case of Kranti Associates (P) Ltd. (supra), the Hon’ble Supreme Court after considering various judgments formulated certain principles which are set out below:

“a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

b. A quasi-judicial authority must record reasons in support of its conclusions.

c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.

f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

g. Reasons facilitate the process of judicial review by superior Courts.

h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice.

i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system.

j. Insistence on reason is a requirement for both judicial accountability and transparency.

k. If a judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or ‘rubberstamp reasons’ is not to be equated with a valid decision making process.

m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny.

n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making the said requirement is now virtually a component to human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553 at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions.”

o. In all common law jurisdictions judgment play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “Due Process”.

Thus, the position of law that emerges from the decisions mentioned above, is that assignment of reasons is imperative in nature and the speaking order doctrine mandates assigning the reasons which is the heart and soul of the decision and said reasons must be the result of independent re-appreciation of evidence adduced and documents produced in the case.

12. At this stage, it would be germane to refer to observations made by the Andhra Pradesh High Court in the case of MRF Mazdoor Sangh v. Commissioner of Labour 2014 (3) ALT 265, wherein the matter of cancellation of registration of trade union, it was held that:

“The show cause notice should reflect the jurisdictional facts based on which the final order is proposed to be passed. The person proceeded against would then have an opportunity to show cause that the authority had erroneously assumed existence of a jurisdictional fact and, since the essential jurisdictional facts do not exist, the authority does not have jurisdiction to decide the other issues.”

14. It is to be noted that the decision of Agarwal Dying and Printing Works (supra) rendered by this Court is subsequent to the filing of issuance of show cause notice as also the order of cancellation of registration. Therefore, what needs to be done is to quash and set aside the impugned order of the authority concerned for it to issue the show cause notice with requisite details and after following due procedure of law, it shall determine the same. The order of the appellate authority is also quashed. Consequently, as this Court has found the base order to be on a very weak edifice, even otherwise, keeping the issue of settlement of the appellate authority to condone the delay, beyond the statutory powers open, for the present, the Agarwal Dying and Printing Works (supra) will hold the field.

15. The petition stands allowed, quashing and setting aside the order dated 04.07.2019 passed by the Assistant Commissioner, Ghatak 9 (Ahmedabad), Range-3, Division-1 under section 29(2) of the Act. The cancellation of registration is revoked. The show cause notice dated 24.05.2019 issued under Rule 22 of the Rules is also quashed and set aside. However, this will not preclude the authority, if the cause will survive by following the procedure in accordance with law.