The High Court · 2025

Judgment

1. 2 The State of Telangana, Represented by its Principal Secretary, Department of Revenue(CT), Secretariat, Hyderabad. The Deputy State Tax Officer, O/o.The Assistant Commissioner (S-T^), . - Begumiet--1 Circle, Begumpet Division, Hyderabad, Telangana -500016. ...PETITIONER ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ of Mandamus or any other appropriate Writ or Order or Direction declaring the action of the 2nd Respondent in passing the impugned order dated 17t0412025 in Ref.No.2A360425045250W for cancellation of registration certificate of the petitioner vide GSTIN. 36AALCT2319K2Z'l along with the show cause notice dated 29t0312025, as illegal, arbitrary, high handed' contrary to the provisions of the CGST Act, 2017 and in violation of principles of natural justice and set aside the same as null and void. lA NO: 1 OF 202s Petition under Section 151 CPC praying that in the circums;tances stated in the affidavit filed in support of the petition, the High Court ma r' be pleased to suspend the ope ration of the impugned Order dated 17tO4l2O2S in Ref.No.24360425Otl;25OW for cancellation of registration cerrtificate of the petitioner passed b1'the 2nd respondent along with the show catrse notice dated 2910312025 and revolie the petitioners registration under the cGS - Act, 2o17 vide GSTIN 36AALCT23't9K2Z1 pending disposat of the Writ petition. €s otherwise, the Petitioner will be put to irreparable loss and hardship. Counsel for the Petitioner: SRI B. KRISHNA REDDY Counsel for the Respondents: SPECIAL GOVT PLEADER FOR STATE TAX The Court made the following: ORDER HON'BLE MRS. JUSTICE SUREPALLI NANDA AND

HON'BLE SRI JUSTICE J. SREENIVAS RAO WRIT PETITION No.15018 OF 2025 JUDGMENT (Per the Hon'ble Mrs lustice Surepalli Nanda) Heard Sri B. Krishna Reddy, learned counsel appearing on behalf of the petitioner and the learned Special Government Pleader for State Tax appearing on behalf of the respondents.

2. The Detitioner aooroached the Court seekinq praver as u nder: "....to issue Writ oF Mandamus or any other appropriate Writ or Order or Direction declaring the action of the 2nd Respondent in passing the impugned Order dated 17.04.2025 in Ref.No. 2A360425045250w for cancellation of registration certificate of the petitioner vide GSTIN: 36AALCT2319K2ZL along with the show cause notice dated 29.O3.2025, as illegal, arbitrary, high handed, contrary to the provisions of the CGST Act, 2077 and in violation of principles of natural justice and set aside the same as null and void, and pass such other order orders as the Hon'ble Court deem fit and proper in the circumstances of the Case." 2

3. The case ()f the petitioner, in brief, is that respor.rdent No.2 issued a show.r:ause notice dated 29.03.2025 to the petitioner, alleging that the commodities mentioned in the e-way b,ills did not match with th€r registrations and that the function ng ol the petitioner was in contravention to the GST Act and Rulesr. However, the notice was vague and failed to specify precise :;rounds or charges alleqed against the petitioner. Despite the vergue sh.ow- cause notice ancl the absence of supportive documents, respondent No.2 issr.red a ,::ncellation order dated 17.04.2025, carrcelling the petitioner's GS-r registration vide GSTIN: 36AAI-CT2311,)K221 with retrospective e"fect from 29.12.2024, without assigninrl any valid reason or afforcling a proper reasonable opportunity tc respond. Aggrieved by the same, the petitioner has filed the p-esent writ petition.

4. PERUSED T HE RECORD A) The impu oned Show cause Notice forca ncellation of Req istrataon d ated 29.O3.2O25 is extracted hereunder: .FORM GST REG-17 lSee Rule 22( 1)l Reference Nc.: 24360325 L52465) To Reg istra tio n I{ u m be r (G STIN/U IN ) : 36 AALCT23 t9 K2Zl Date:29/O3/2025 i i I I i J TELANGANA RECYCLING PRIVATE LIMITED L-B-505lClt3/1, PRAKASH NAGAR, BEGUMPET, Hyderabad, Hyderabad, Telangana, 500016 Show Cause Notice for Cancellation of Registration Whereas on the basis of Information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:

1. Others Remarks: In contraventions to the GST Act and Rules, Commoditv mention din h Wawh h reqistrations. C ATE n t rnafa hin d urith t t Yolr are herehw directed tof urnlsha rED vtot h e not ce within seven working davs from the date of service of this notice, You are herebv directed to aDoear before the undersiqned authoritv on O3lO4l2O25 at 13:OO. If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits. Please note that your registration stands suspended wath effect from 29 / 03 / 2(J25. Kindly refer the supportive document attached for case specific details. Place: Telangana Datei 29/03/2025 IWALA HEMALATHA Deputy State Tax OFficer BEGUMPET-1 , l 4 Sig natu re Not Vr-'rifled." B) The order imouqned dated L7.O4.20 5 is extracted hereun d er: *FORM GST REG-19 ISee rule 22( 3 )] Reference N rmber: 2A360425O45250W Datei tj iO4/2O25 To NAmeI: TELA\GANA RECYCLING PRIVATE LIMITED Addre,ss: 1-3-505/C/t3/1, PRAKASH NAGAR, BEGUMpET, Hyderabad, tl yderabad, Telangana, 500016 GSTIN/UI N : 3 6 AALCT23 79K221 Application [(eference Number (ARN): AA3603250S 07192 Order for Cancellation of Registration This has Tot erence to show cause notice issued dated 29/0312025. Whereas no reply to the show cause notice has been submitted; and whereas, the undersigned based on record avall:rble with this office is of the opinion that your registration is liable to be cancelled for following reason(s):

1. Oth,:rs Remarks: In corrtraventions to the GST Act and Rules, Comn-rodity mentioned ir the Way bills are not matching with the reqistrations. Fteasonable opportunity given for 7 working days and informed -[ax payer to respond on the show cause r]otice and prove his ,lenuineness. No reply for the Show cause notice issued and nore of the members of the TELANGANA RECY(.LING PRIVATE LI[4I-r:D ..,/ 5 Further, huge e-ways bills was raised in the month of March 2025 about 12 cr+ with in 15 to 20 days. Seems suspicious and requested the Tax payer for the clarification to identify the genuinety. Still there is no response from the Tax payer. Hence Cancelling the Registration. reoistration is 291L212024.

2. Kindly refer to the supportive document(s) attached for case specific details. - Not Applicable

3. It may be noted that a registered person furnishing return under sub-section (1) of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR-10 within three months of the date of this order.

4. You are required to furnish all your pending returns. 5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation. Place: Telangana Date: 17/O4/2O25 IVVALA HEMALATHA Deputy State Tax Officer BEGUMPET - I" DISCUSSION AND CONCLUSION: DISCUSSION:

5. Learned counsel aoDear tn o on behalf of the oetitaoner maln v Duts forth t h e followino submissions:- (a) The show-cause notice dated 29.03.2025, issued to the petitioner by the 2nd respondent for cancellation of petitioner's / r' (J 6 registration, is va3ue and does not provide specific details regarding the alleged cont.lventions of the GST Act and Rules in "elation to the commoditie:; mentioned in the e-way bills' As a I esult' the petitioner was urrable to submit a proper explanation in rr':sponse to the vague shotv-cause notice dated 29 '03'2025 issu':d to the petitioner. (b) Withc ut affording the petitioner an adequate opportunity to respond to the said Show cause no ice dated 29.03.202-5, thir lmpugned order dated t7.04.2025' had been passed, cancellirg the petitioner's registration w'e f , 2')'12'2024, statingthatthr:petitionerfailedtorespondtothes'low-cause notice dated 29.C3.2025. (c) The learned counsel appearing on behelf of the petitioner furtht:- contends that In the absence of a J'roper and specific notice, arty enquiry or subsequent action stands vitiated' (d) No r;rrpporting documents were enclosed along with the showcauseno:icedated29.03.2025issuedtothep(rtitioneras alleged by ther respondents in the show cause notice dated

29.03.2025, Based on-the aforesaid su bmissio ns the learned cou nsel edt hat th e h lf of the DEtitio r cont aooearinq on be Detitioner is eE titled for the relief as oraved fo r 6 b o t s r n 7 r n Ple r n t submissions:- i) The impugned show-cause notice for cancellation of registration dated 29.03.2025 clearly indicates that a supporting document was attached, provicling case-specific details along with the said notice' ii) There is no illegality in the order impugned' dated 17'04'2025 cancelling petitioner's registration w'e'f '29 'l2'2024 since petitioner failed to respond to show-cause notice' dated 29'03'2025' iii) The petitioner failed to appear before 03.O4.2025 at 13:00 therefore' petitioner order f mpugned dated tl '04'2025 issued by the 2nd respondent' the 2nd resPondent on cannot challenge the s t e fore id s r c r e r t n r h tf t h t P o d nt b G ve n t nd h dismissed. cON CL SION:- 8

7. A bare oerusal of the order imouoned dated \-Z_O4_.2O?5 ther oetitioner bv the2ndr esDon ent ( referre to a nd extra ctecl a bove) ind icates the 3'd ara as under: - " Furtherr huge e-ways bills was raised in the month of March, :1025 about L2 cr+ within 15 to 20 days seems suspicious and requested the Tax Payer clarification to identify the genuinety still for the there is response from the Tax payer,,. A bare perusal of the show_cause notir:e, dated 29.03.2025 ol the 2nd respondent (referred to and extracted above) does not indicate any charge having been framed by the 2nd respondent against the petitioner in the impugned show-cause n'tice dated 29.03.2025 issued to the petitioner by the 2nd respondent pertainang to the above referred issue pertaining to huge e-ways bills having been subject in Marclr, 2025 about 12 cr+ within 15 to 2O days, therefore, this Court agrees with the main submission put_ forth by the learned counsel appearing on behalf of the petitioner that the impugned show-cause notice dated 29.03.2025 issued to the petitioner by the 2nd respondent is very vague and hence, petitioner could not submit his ra ised 9 exptanation to the said show-cause not'ce issued to the petitioner by the 2"d respondent, dated 29'O3'2O25'

8. This Court opines that the plea of the learned Special Government Pteader appearing on behalf of the respondents that a supporting document was enclosed along with the show-cause notice, dated 29.03'2O25 giving details of the allegations leveted against the petitioner is however disputed by the learned counset appearing on behalf of the petitioner, placing reliance on the specific averments made at paragraph No.5 of the affidavit filed by the petitioner in support of the Present writ petition, contending that no were attached to the show-cause supporting documents noticeforcancellationofregistrationdated29'O3'2025'as contended bY the resPondents.

9. This Court opines that the said supporting documents even if had been forwarded to the petitloner along with the show cause noticedated29.o3.2oz5issuedtothepetitionercannotbetreated notice, as the details of the alleged as part of the show-cause contraventions to the GST Act and Rules alleged against the petitioner are admittedly not described in the said show-cause l0 notice dated ,'t).03.2025 issued to the petitioner to enable the petitioner to sL t)mit petitioner,s explanation to the said .;how cause notice. In viev/ of the fact that the impugned o-der dated 77.04.2A25 is . tt an order passed on merits, ilnd the lihow cause notice dated 29.O3.2025 issued to the petitioner t:,y the 2nd respondent adnr ttedly as borne on record is very vagr-re this Court opines that the impugned order dated 17.o4.2025 had been passed mechanically arcl without proper application of mind. 1O. The Aoex Court in the Judqmen t reported in (: 2o1O) 13 scc 427 in Orvx Fisheri s Pvt., Ltd., Vs. Uni n of India & others, tn its Head note dulv referrinq the releva nt oaras of the said iudo ment, ob erved as under: "It is well :;ettled that a quasi-judicial authority, while acting in exercise, of its Statutory power must act fairly and must act with an ofx)n mind while initiating a show_ cause proceeding. A show-c,tuse proceeding is meant to give ilre person proceeded against a reasonable opportunity of rraking his objection .rgainst the proposed charges indicatcd in the notice, (Para 24). h A taqe of show the o rson -ca use. e e ls defen ce and orove his rnnocen ce.Att hat staqe the_ authoritv issur q the e-sh eet, can not, inste ad of r h definit concl usrons t. If that is one. alleqed quil of hi as has b en done in the presen t case oroceedin q i n itiated cha ro s show- cause n oti bv the m w! t vitiated by unfairness and bias and the subsecuent proceedinqs become an idle ceremonv. (Para 27) Justice is rooted in confidence and justice is the goal of a quasi-judicial proceeding also. If the functioning of a quasi- judicial authority has to inspire confidence in the minds of those subjected to its jurisdiction, such. authority must act with utmost fairness. Its fairness is obviously to be manifested by the language in which charges are couched and conveyed to the person proceeded against. In the present case, from the show-cause notice it is clear that the third respondent, Deputy Director, MPEDA HAS demonstrated a totally closed mind at the stage of show- cause notice itself. Such a closed mind is inconsistent with the scheme of Rule 43 of the MPEDA Rules. (Para 29). It is true that the show-cause notice cannot be read hyper technically and it is well settled that it is to be read reasonably. But, while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show- cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi- judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. (para 31) Therefore while i ssu o a show-cause notice. the authorities must take care to manifestlv keeo an oDen mind as thev are to act fairlv in adiudoino the ouilt or otherwise of the Derson oroceeded aqainst and soeciallv when the authoritv has the oower to take a punitive step aqainst the person after qivinq him a show- cause notice. (oara 32) The principle that justice must not only be done but it must eminently appear to be done as well is equally t2 a. such a mind of applicable to quasi-iudicial proceeding proceeding has to inspire confid-en-c.e in ihose who are subject to it. (para 33)" in the Dulv applvino the observations of the Apex Co' iudoment ( reIerredto and extr cted above ) and dul v exa mininq the-contents of the imDuqned show-cau senoti dat d 29.03.20 25. it rs am olv evident a nd borneonr ecord that admittedlv, the imouoned show-cause notice' dated fails tlle testof bv the 2nd resoondent

29.O 3.2025 issued u fa irn s an indica

11. TA KING TNTO CONSI DERATI ON: a) The facts and circumstances of the case, b) The submissions made by the learned counsel appearing on behalf of the petitioner, c) The imprrgned Show cause notice dated 29'O3'2025 (referred to and extracted above), which 'ldmittedly indicates unfairness and bias d)The order impugned dated L7,O4.2O25 (referred to and extra€ted above), which admittedly is not an order passed on merits I \r 13 e) The observationsinthejudgmentoftheApexCourt SCC 427 (referred to and reported in (2010) 13 extracted above) This writ petition is allowqd' and the impugned show- cause notice dated 29'o3'2O25 issued by the 2"d respondent to the petitioner and the order dated L7'O4'2O25' issued by the 2'd respondent which pertains to the cancellation of registration, are set aside' It is however observed that the respondents are at liberty to proceed against the petitioner in accordance to law by issuing a fresh show-cause notice' ctearly stating the specific charges against the petitioner' so as to enable the petitioner to submit his exPlanation with resPect to the However, there allegations made against the petitioner' shall be no order as to costs' Miscellaneous Petitions, if anY q,pendins fnth is writ Petition, shall stand closed. //TRUE COPY// i35E '^"-tH'[S?HXf; SECNOT(bFFGER '"illiffi'ti',ifiifl#.effi,dfr#*p#if::"iffi r"'' TJ I i I I I i ,l i1 HIGH COURT CC TODAY DATED:0710512025 ORDER WP.No.15018 of 2025 ') ': L /\.'.., s \- F- l:. :i J, c ALLOWING THE WRIT PETITION WITHOUT COSTS 4u

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