Allowed

P Murugesan v. The State of Andhra Pradesh

Andhra Pradesh HC19 Sept 2023WP/24174/2023

Case brief

AI extract

What is this about?

This writ petition challenged the cancellation of the petitioner's GST registration. The High Court held that both the show-cause notice and the cancellation order were bereft of specific details regarding the fraud or misstatement alleged. The Court quashed the orders, violating natural justice, and restored the registration.

What did the court decide?

Impugned show-cause notice and cancellation order set aside; GST registration of the petitioner restored within one week.

P Murugesan Vs The State of Andhra Pradesh — GST and Indirect Tax | Andhra Pradesh HC (2023)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

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(Special Original Jurisdiction)

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TUESDAY, THE NINETEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY THREE

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PRESENT

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HO
io

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THE HON’BLE SRI JUSTICE U.DURGA PRASAD RAO AND THE HON’BLE SRI JUSTICE B. V. L. N. CHAKRAVARTHI WRIT PETITION NO: 24174 OF 2023

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Between:

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P. Murugesan, Works Contractor, S/o. Papa Swamy, Aged about 52 Years, D.No. 7- 77, Tanakantivaripalle, Gudupalle Village, Mulakalacheruvu Mandal, Annamayya District, Andhra Pradesh-517309.

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...PETITIONER AND

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The State of Andhra Pradesh, Rep. by its Principal Secretary to Government, Revenue (CT-I) Department, Velagapudi, Amaravathi, Guntur District, Andhra Pradesh.

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The Assistant Commissioner (ST), Circle-11, Nellore, SPSR Nellore District Andhra Pradesh.

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...RESPONDENTS

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Petition under Article 226 of the Constitution -of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction particularly in the nature of Writ of MANDAMUS declaring the action of the 2’*' respondent i.e. Assistant Commissioner (ST), Circle -II, Nellore in cancelling the registration of the Petitioner without transferring the registration from the old place to new place of business and without even mentioning the elates properly and without even submitting the copies of panchanama and the alert note and without saying anything about the input tax credit availed by the Petitioner as illegal, arbitrary, unjust, improper. Unethical, contrary to the GST Act, 2017 and the rules therein’ violative of article 14,19(1)(g), 21, 300A of the Constitution of India and also violative of Principles of Natural Justice and consequently to set aside the same and direct the 2" Respondent to restore the registration and direct to transfer the registration to the new place of business and consequently.

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lA NO: 1 OF 2023

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the writ petition, the High Court may be pleased to direct the 2 respondent to revoke the cancelled registration and direct the respondent to transfer the registration to the new place of address else the

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**nX'nlodV ®''‘' ’’® "“'■I'® contracts that has been ?h a D Petitioner would be cancelled. Hence therefore, it is prayed that the ne"w S°o" b^S.”® ’'t^oefer it to

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Counsel for the Petitioner: SRI DR. M.V.K. MOORTHY. SENIOR COUNSEL FOR - SRI M. V. J. K. KUMAR

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Counsel for the Respondents: GP FOR COMMERCIAL TAX

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The Court made the following: ORDER

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HON’BLE SRI JUSTICE U.bURGA PRASAD RAO AND HON’BLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

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WRIT PETITION No.24174 of 2023

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ORDER; (perUDPR,J)

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The challenge in this writ petition is to the order in Reference Number:ZA3706230938071, dated 30.06.2023, passed by the 2"'* respondent in cancelling the GSTIN/UIN No: 37ALKPM6797R1ZQ ofthe petitioner.

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Heard Dr.M.V.K.Moorthy, learned Senior Counsel, representing on behalf of Sri M.V.J.K.Kumar, learned counsel for petitioner on record and learned Government Pleader for Commercial Tax representing on.behalf of the respondents.

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(a) The main grievance of the petitioner, as ventilated by the learned counsel for petitioner, is that while the show-cause notice dated 14.06.2023 was issued by the 2"** respondent on the alleged ground that as per Section 29(2)(e) of the CGST/SGST Act, 2017, the petitioner obtained the registration by means of fraud, willful misstatement or suppression of facts without giving details as to the nature of fraud, suppression of facts allegedly committed

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by the petitioner, surprisingly, the cancellation of registration was made altogether on a different ground as is depicted from, the impugned order dated 30.06.2023.

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(b) Referring to the cancellation order, learned Senior Counsel would submit that all together an unconnected allegation was mentioned therein in S.No.3 of the order. He thus, prayed to set aside the cancellation order.

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Learned Government Pleader opposed the writ petition on, the ground that the cancellation was done in accordance with the rules.

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The point for consideration is whether there are merits in the writ petition to allow?

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In the light of the above respective submissions, a perusal of the show-cause notice dated 14.06.2023 issued by the 2"'* respondent shows that on one main ground, the show-cause was issued which is as follows:-

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^^Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelledfor thefollowing reasons:

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1 Section 29(2)(e)-registration obtained by means offraud, wilful misstatement or suppression offacts.

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You are hereby directed tofurnish a reply to the notice •within seven working days from the date of service of this notice."

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7. As rightly submitted; by the learned Senior Counsel for petitioner, the show-cause notice is woefully silent as to the nature of the fraud allegedly committed by the petitioner and the nature of the misstatement or suppression, of facts made by the petitioner in obtaining the registration. Therefore, the show-cause notice which will be issued with an avowed object to invite an appropriate reply. is not clearly depicting the nature of fraud and hence, its purpose is defeated and thereby, principles of natural justice were denied at the very first instance itself.

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Be that as it may, a perusal of the reply dated 21.06.2023 shows that the petitioner submitted his explanation on the premise that the show-cause notice might be issued with regard to the difference in the office address of the petitioner. In reply notice, it is stated that the petitioner tried to amend their address in the GST portal but the portal was showing that GST registration was

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suspended. On that ground, the petitioner sought for revocation of suspension of the registration. The above explanation would no doubt show that the petitioner had some anticipation that in the show-cause notice, the fraud or misstatement or misrepresentation of facts might be relating to the incorrectness of the official address furnished by him for obtaining registration. When enquired, learned Senior Counsel would submit that the said reply was based on a premise that since the official address of the petitioner was changed, the said show-cause notice might be issued on that ground. Be that it may, since the show-cause notice itself is not clear as to the nature of the fraud or mis-statement, the authority * * J .. . cannot take shelter under the said , show-cause notice to judge the correctness, truth or falsity of the cancellation. Be that as it may, a perusal of the order of cancellation or registration dated 30.06.2023 passed by the 2™* respondent reads thus:

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“FFTiereaj reply to the show cause notice has been submitted vide AA370623013313N, dated 21.06.2023; and whereas, the undersigned on examination of your reply to show cause notice and based on record available with this office is of the opinion that your registration is liable to be cancelledforfollowing reason(s):

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Section 29(2)(e)-registmtion obtained by means offraud, 'wilful misstatement or suppression offacts. " 9. In the said order, neither the nature of the reply nor the reason for rejecting the reply is .mentioned. On the other hand, it simply revealed that the 2"‘* respondent on examination of the reply to the show-cause notice and basing on the record available with the office was of the opinion that the registration was liable to be cancelled on the ground that the registration is obtained by fraud, willful misstatement or suppression of facts. Here, it should be mentioned that the notices and orders issued by the public authorities must be clear to the subject, and supported with reasons for decisions or opinions. When we test the contents of the show cause notice and the order in the instant case, as noticed above, the show-cause notice is bereft of the required facts with regard to the nature of allegation made against the petitioner. No doubt, the petitioner with some anticipation or on information, submitted his explanation. Even that explanation was not discussed and the reason for refusal is not mentioned in that final order but the registration was cancelled by the 2™* respondent. In the entire

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gamut of events, we find that there is a clear-cut violation of the

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principles of natural justice.

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Accordingly, this writ petition is allowed setting aside the impugned show-cause notice dated 14.06.2023 and final order dated 30.06.2023 passed by the 2"'* respondent with a direction to restore the registration of the petitioner within one week from the date of receipt of copy of this order. We make it clear that the 2"^* respondent, if proposes, can issue a fresh show-cause notice with clear allegations so as to enable the petitioner to submit his reply and there upon can pass an order after giving opportunity of hearing to the petitioner. No costs.

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As a sequel, interlocutory applications pending, if any, in

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this case shall stand closed.

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Sd/- N. NAGAMMA ASSISTANT REGISTRAR //TRUE COPY// ^^^SE^rO'N^OFFICER

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To, 1.

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2. The Assistant Commissioner (ST), Circle-Il, Neilore, SPSR Nellore District Anonra Hraaesh. ’

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One CC to Sri M. V. J. K, Kumar, Advocate [OPUC] 5.' Two C CoX^°'^ Commercial Tax. High Court of Andhra Pradesh. [OUT] Cnr

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• -’i

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HIGH COURT

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DATED: 19/09/2023

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ORDER

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WP.No.24174 of 2023

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rn
(I 2 7 SEP 2023

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ALLOWING THE W.P. WITHOUT COSTS

P Murugesan v. The State of Andhra Pradesh

Case brief

What is this about?

What did the court decide?

P Murugesan v. The State of Andhra Pradesh

Case brief

What is this about?

What did the court decide?

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