Order date – 10 August 2022

Facts – 

• The Petitioner, DRS Wood Products is a partnership firm carrying on business of manufacture and trading of Veneer.
• The present petition against the order dated 15.07.2020 whereby the application for revocation of the cancellation of the registration was rejected.
• A show-cause notice dated 08.05.2020 was issued to the petitioner under Rule 22(1) of the GST Rules whereby it was alleged that “Taxpayer found Non-functioning/Not Existing at the Principal Place of Business" thus the registration is liable to be cancelled. By order passed on 22.05.2020 the cancellation of registration was confirmed.

Issue – 

• Whether the action taken against the petitioner in respect of cancellation satisfies the test of the requirement of Section 29 of the GST Act or not?

Order – 

• The Court observed that the show-cause notice is not relied upon any report or inquiry conducted to reach the conclusion nor on what basis was the allegation levelled against the petitioner. Moreover, it does not even indicate when the inspection was carried.
• It further pointed out that cancellation of registration is a serious consequence affecting the fundamental rights of carrying business and in a casual manner in which the show-cause notice any reasoning demonstrates the need for the State to give the quasi-adjudicatory function to persons who have judicially trained mind. The order of cancellation of the registration on the ground that no reply was given is equally lacking in terms of a quasi-judicial fervor.
• The court found the orders contrary to the mandate of Section 29 and 30 of the Act as well as the principles of adjudication, thus impugned order dated 18.01.2021 and 15.07.2020 are set aside.