Vidya Coal Depot vs Additional Commissioner Grade (Appeal) II

Allahabad High Court has held the Registration cancellation order invalid as it is not a speaking order. Vidya Coal Depot vs Additional Commissioner Grade (Appeal) II [Neutral Citation: 2023:AHC:192420; 05-Oct-2023

1. Heard Sri R.R. Agarwal, learned Senior Counsel assisted by Sri Nitin Kumar Kesharwani, learned counsel for the petitioner and Sri Rishi Kumar, learned ACSC for the respondents.

2. The instant Writ Tax is being entertained by this Court in view of the fact that G.S.T. Tribunal is not functional in the State of Uttar Pradesh pursuant to the Gazette notification of the Central Government bearing number CG-DL-E-14092023-248743 dated 14.09.2023.

3. By means of this writ petition, the petitioner has assailed the order dated 14.10.2022 passed by Assistant Commissioner Sector-14 Commercial Tax, Agra cancelling the GST registration of the petitioner under Section 29 (2) of U.P.G.S.T. Act. On appeal, the appellate authority by impugned order dated 1.12.2022 confirmed the order of cancellation of the registration of the petitioner. Further, a mandamus has been sought for restoration of the registration of the petitioner forthwith with effect from 18.08.2022.

4. Brief facts of the case are that Smt. Vidya Devi is the proprietor of the petitioner firm carrying the business of purchase and sale of coal on retail basis for which the GSTIN was granted. Since the petitioner’s turn over was below Rs. 50 lacs, it opted for compounding scheme under Section 9(1) of U.P.G.S.T Act as provided under Section 10 of the said Act. On 24.09.2022, a show cause notice was issued by the respondent no.2 to the petitioner proposing to cancel the registration of the petitioner for the reason assigned therein with the direction of the TTZ authority and written direction by JC (SIB) B Agra for cancellation of registration of all coal depot. The petitioner submitted the reply through registered post on 3.10.2022 in response to the notice dated 24.09.2022. Being dissatisfied with the reply of the petitioner, the registration of the petitioner was cancelled vide impugned order dated 14.10.2022 with effect from 18.8.2022. Feeling aggrieved by the aforesaid order, the petitioner preferred an appeal, but the same has also been rejected by order dated 1.12.2022. Hence the present petition.

5. Learned Senior Counsel for the petitioner has submitted that the petitioner has not violated any provision of GST Act; more precisely, contained in Section 29 read with Rule 21 of UPGST Act and Rules framed therein. The registration of the petitioner has been cancelled at the behest of direction issued by JC (SIB) B, Agra as well as the direction of TTZ authority, but neither a copy of such direction has been provided at any stage to the petitioner nor the same was annexed along with the copy of notice issued to the petitioner. He further submitted that the petitioner submitted a detailed reply by sending through registered post on 3.10.2022, which was received on 4.10.2022 in the office of respondent no.2, which fact is mentioned in the impugned order dated 14.10.2022. He further submitted that on perusal of the impugned order of cancellation, no reason whatsoever has been assigned. He further submitted that the first line of impugned order refers to the reply of the petitioner dated 4.10.2022 in response to the show cause notice dated 24.09.2022, but the very next line refers that no reply has been submitted.

6. Further, he submitted that on the date fixed for submitting the reply, the order was not passed, hence, the impugned order cannot sustain. In support of his submission, learned Senior Counsel has placed reliance upon the judgment of Division Bench of this Court delivered in the case of M/S Videocon D2h Ltd. Vs. State of U.P. and 3 Ors. (Writ Tax No.243 of 2016), decided on 16.03.2016. He further submitted that on the date fixed, the authority ought not to have proceeded ex-parte, if petitioner did not appear, and if the order was passed on the next date, the same cannot sustain in the eye of law. In support of his contention, he relied upon the judgment of Division Bench of this Court in the case of Videocon D2h (supra). He further submitted that assuming that the order was passed in view of the direction of the Hon’ble Apex Court in the case of M.C. Mehtra (Taj Trapaziam Matters) Vs. Union of India & Another reported in 1997 (2) SCC 353, but the same will not be applicable with regard to coal dealers as there is no such direction therein. In support of his contention, he further placed reliance upon the Division Bench Judgment of this Court passed in Writ Tax No.738 of 2011 (M/S Agra Coal Suppliers Vs. State of U.P., Thru’ Principal Secry., Instt. Finance & Anr.), decided on 24.05.2011.

7. He further submitted that the GST Act is a complete Code in itself and the cancellation of registration, if any, has to fulfil the test of requirement mentioned in Section 29 of the UPGST Act read with Rule 21 of the Rules framed therein. In absence of any violation of provision in the said Section or Rule, the registration cannot be cancelled. In support of his submission, he also placed reliance upon the judgment of this Court passed in the case of Drs. Wood Products Lucknow Vs. State of U.P., 2022 NTN (Vol.80)-309.

8. He further submitted that even assuming without admitting that under the Environment (Protection) Act, 1986, the power has been exercised under Section 5 directing for cancellation of registration of the coal depot in Agra, the same cannot be passed as the said provision only applies to industry or any person involve or such operation, but the petitioner is only the coal dealer carrying on business of purchasing and selling, which do not pollute the environment. Therefore, it will not be covered by the said direction.

9. He further submitted that for the first time in the counter affidavit Annexure CA – 2 was brought on record showing that TTZ authorities have been constituted under the provision of Section 3 sub-clause (3) of Environment (Protection) Act, 1986 and the same has been constituted by way of Notification dated 17.05.1999, which was for a period of two years. He further submitted that thereafter in 2003, the period was again extended for two years only and thereafter in 2005, again the same was extended for two years. In view of the said fact, he submitted that period after 14.1.2005, TTZ authorities cannot act as its life had already been expired and have no authority to proceed further or pass any direction in absence of any material brought on record. He further submitted that the direction issued by the TTZ authorities as per Annexures CA-2 and CA-3 of the counter affidavit filed by the Assistant Commissioner, Sector-14, Commercial Tax, Agra Range Agra, the orders or directions are totally without jurisdiction. He further submitted that taxing institute has to be strictly construed and it does not permit to import the provision of other Statute. In support of his submission, he next placed reliance upon the judgment of Hon’ble Apex Court passed in the case of Union of India and others Vs. Ind- swift Laboratories Limited, (2011) 4 SCC 635.

10. He further submitted that even assuming without admitting that some direction was given for maintenance of coal register, which has come in the counter affidavit for the first time, he submitted that even under the UPGST Act, the book of account are to be maintained and the petitioner is maintaining the same. He further submitted that the respondent no.2 himself has annexed Annexure-CA-21 the stock register of coal maintained by petitioner, along with the counter affidavit. Therefore, the allegations levelled against the petitioner for not maintaining the coal register is itself against the records.

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