2025(04)LCX0677

Mohd Rameez Ahmed

Versus

The Deputy State Tax Officer

WRIT PETITION NO: 9271 OF 2025 decided on 30-04-2025

HIGH COURT FOR THE STATE OF TETANGANA
AT HYDERABAD
(Special Original Jurisdiction)

WEDNESDAY ,THE THIRTIETH DAY OF APRIL
TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HONOURABLE SMT JUSTICE RENUKA YARA

WRIT PETITION NO:9271 OF 2025

Between:

M/s.Mohd Rameez Ahmed, Plot No.38, Yousuf Nagar, Near MMTS,
Borabanda, Hyderabad - 500 018. Rep. by its Proprietor Mr.Mohd Rameez
Ahmed
                                                                                                        ...PETITIONER

AND

1 THE DEPUTY STATE TAX OFFICER, Hydemagar-Il Circle, Hyderabad. State
of Telangana.

2. The Assistant Commissioner (ST), Hydemagar-ll Circle, Hyderabad. State of
Telangana.

3.The Deputy State Tax Officer, Vengalarao Nagar-I Circle, Hyderabad. State of
Telangana.

4. The State of Telangana, Rep. by its Principal Secretary, Revenue (CT)
Department, Telangana Secretariat, Hyderabad.

5. The Union of lndia, Rep. by its Secretary, Department of Revenue, Ministry of
Finance, New Delhi.
                                                                                        ...RESPONDENTS

Petition under Article 226 of the 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 1 st Respondent in passing the Order for Cancellation of Registration in Form GST REG-19, dated 11.11 .2024, without providing sufficient opportunity of being heard to the Petitioner, without following the due process of law, as arbitrary, @ntrary to thd provisions of the Central Goods and Service Tax Act 2017, without jurisdiction, contrary to Article 14,19(1)(g) and 21 of the Constitution of lndia and the same is in violation of Principles of Natural Justice and Rule of Law and consequently set aside the order for cancellation of Registration in Form GST REG-19, dated 11.11.2O24 passed by the 1st Respondent, as null and void

lA NO: 1 OF 2O25

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Order for Cancellation of Registration in Form GST REG-19, dated 1 1 .1 1.2024 passed by the 1st Respondent and consequenfly direct the 1 51 Respondent to Restore the Registration certificate of the petitioner, forthwith, in the interest of Justice and equity, pending disposal of the above Writ Petition, as otherwise, the Petitioner will be put to severe loss and hardship.

Counsel for the Petitioner: SRl. MOHAMMED RAFI

Counsel for the Respondent Nos.l to 4: SRI T. CHAITANYA KIRAN AGP
REPRESENTING FOR SRI SWAROOP Special Govt pleader for State Tax

Counsel for the Respondent No.S: SRI GADI PRAVEEN KUMAR DY.
SOLICITOR GENERAL OF INDIA

The Court made the following: ORDER

THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HONOURABLE SMT. JUSTICE RENUKA YARA

WRIT PETITION No.9271 of 2025

ORDER: (Per Hon’ble The Acting Chief Justice)

Sri Mohammed Rafi, learned counsel for the petitioner and Sri T. Chaitanya Kiran, learned Assistant Government Pleader representing Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondents.

2. With the consent finally heard.

3. Learned counsel for the petitioner submits that the impugned order of cancellation of registration dated 11.11.2024 (Annexure P-1) is based on cryptic show-cause notice dated 18.10.2024. Neither in the show-cause notice nor in the impugned order minimum essential factual details were not mentioned on the strength of which breach is alleged. In the absence of reasons, the show-cause notice and impugned order of cancellation of registration cannot sustain judicial scrutiny. The curtains were already drawn on this aspect by this Court in W.P.No.24494 of 2024, dated 09.09.2024.

4. Learned counsel for the respondents opposed the prayer and supported the impugned order.

5. We have heard at length.

6. This Court in the W.P.No.24494 of 2024, dated 09.09.2024, opined as thus:

“5. In W.P.No.17400 of 2024, this Court at relevant paragraphs opined as under:

“6. The singular reason assigned in the impugned notice dated 29.02.2024 reads asunder:

“1. Section 29(2)(e)-registration obtained by means of fraud, willful misrepresentation or suppression of facts”.

Apart from this bald statement, there exists nothing in the show cause notice which can throw light as to what is the nature of ‘fraud’ or ‘willful misrepresentation’ or ‘suppression of fact’ by the petitioner. Thus, show cause notice is cryptic and an example of non application of mind. In absence of factual basis and necessary details, notice becomes vulnerable.

7. This Court, recently, considered this aspect in T S R Exports (supra) and held as under:

9. We find subsistence in the argument of the learned counsel for the petitioner that the factual backdrop or the reason on the strength of which, conclusion of fraud or misstatement or suppression of facts was drawn is totally absent in the show cause notice. The show cause notice, in our considered opinion, should spell out the factual backdrop of breach, on the strength of which the department has rejected and concluded that Section 29 (2) (e) of the Act, can be invoked. If minimum factual backdrop and nature of breach is not mentioned with accuracy and precision, the petitioner was not in a position to file reply.

10. The Apex Court expressed the need of issuance of such notice in Canara Bank vs. Debasis Das [2003] 4 SCC 557, at para No.15, which reads as under:

15. ...Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time…”

11. In the Rajesh Kumar vs. CIT [2006] 157 Taxman 168/287 ITR 91/[2007] 2 SCC 181, the Apex Court at para No.61, held as under:

“61. ...The notice issued may only contain briefly the issues which the assessing officer thinks to be necessary. The reasons assigned there for need not be detailed ones. But, that would not mean that the principles of justice are not required to be complied with. Only because certain consequences would ensue if the principles of natural justice are required to be complied with, the same by itself would not mean that the court would not insist on complying with the fundamental principles of law...”

12. This Court in Sri Avanthika Sai Venkata vs. Deputy State Tax Officer [2024] 159 taxmann.com 235/83 GSTL 311 (Telangana)/[W.P.No.1596 of 2024, dated 23- 1-2024] and S.B. Traders vs. The Superintendent [2022] 145 taxmann.com 556/[2023] 96 GST 13/69GSTL 175 (Telangana)/[W.P.Nos.39498 and 39502 of 2022, dated 28-10-2022], interfered with the impugned proceedings and order therein because the reasons were not mentioned while initiating proceedings against the petitioners therein.

13. Needless to mention that the show cause notice dated 09.11.2023 became the foundation for issuance of orders dated 29.11.2023 and 23.02.2024, since the foundation cannot sustain judicial scrutiny, the entire edifice of orders passed thereupon are liable to be jettisoned”.

(Emphasis Supplied)

8. Since the show-cause notice and suspension of registration is founded upon a cryptic notice dated 29.02.2024, both are set aside. On regular basis, we are painfully noticing this kind of notices, whereby, without assigning adequate reasons, the business of taxpayer is suddenly suspended. In absence of basic reasons available in the show-cause notice, the party aggrieved by it cannot even prefer an effective representation. We wonder how in such an insensitive and mechanical manner, the registrations are being suspended by issuing defective showcause notices. Such orders certainly have an adverse impact on the livelihood of taxpayer and hits Article 21 of the Constitution. The authorities must remind themselves that the words ‘LIFE’ and ‘FILE’ contain same letters. Every file has a nexus with somebody’s ‘life’ or liberty. Thus, the authorities should sensitize themselves and should not pass order/notice in the mechanical manner it is passed in the present case. We hope and trust that, henceforth, the authorities will take care of this aspect. Learned counsel for the petitioner insisted for imposition of costs. Faced with this, Sri P.Sri Harsha, learned Assistant Government Pleader, submits that he will appraise the authorities about observation of this Court so that henceforth such mistakes do not occur. In view of this assurance, in the instant case, we are not imposing any costs on the respondents.

9. Resultantly, the impugned show-cause notice dated 29.02.2024 and the order suspending the registration are set aside. Liberty is reserved to the respondents to proceed against the petitioner in accordance with law.”

6. In the instant case, the single line allegation against the petitioner reads – ‘THE TAX PAYER RECEIVED ITC FROM CANCELLED AND NON EXISTENT TAX PAYERS’.

7. We find substance in the argument of the learned counsel for the petitioner. The details of such cancelled or non-existent tax payers are not mentioned. In absence thereof, the petitioner’s right to file effective reply was taken away. Thus, the impugned show-cause notice dated 23.04.2024 and order of suspension of registration of the petitioner are set aside. The respondents are given liberty to proceed against the petitioner in accordance with law.

8. The Writ Petition is allowed to the extent indicated above. There shall be no order as to costs. Interlocutory applications, if any pending, shall stand closed.”

7. If the impugned show-cause notice and the order of the cancellation are tested on the anvil of law laid down by this Court, it will be crystal clear that the show-cause notice only recites the legal provisions which are allegedly violated, but how they are violated and what is the factual background are missing. We disapproved such show-cause notice/order in the aforesaid order in W.P.No.24494 of 2024.

8. Resultantly, the show-cause notice dated 18.10.2024 and the impugned order dated 11.11.2024 are set aside. Liberty is reserved for the respondents to proceed against the petitioner in accordance with the law.

9. With the aforesaid, the Writ Petition is disposed of. No costs. Miscellaneous applications, if any pending, shall stand closed.

_______________________
SUJOY PAUL, ACJ
______________________
RENUKA YARA, J

Date: 30.04.2025

TRUE COPY/

To,

1 THE DEPUTY STATE TAX OFFICER, Hydemagar-Il Circle, Hyderabad. State
of Telangana.

2. The Assistant Commissioner (ST), Hydemagar-ll Circle, Hyderabad. State of
Telangana.

3.The Deputy State Tax Officer, Vengalarao Nagar-I Circle, Hyderabad. State of
Telangana.

4. The State of Telangana, Rep. by its Principal Secretary, Revenue (CT)
Department, Telangana Secretariat, Hyderabad.

5. The Union of lndia, Rep. by its Secretary, Department of Revenue, Ministry of
Finance, New Delhi.

6. One CC to SRl. MOHAMMED RAFI Advocate [OPUC]

7. One CC to sri Gadi Praveen Kumar, Deputy Solicitor General of lndia [OPUC]

8. Two CCs to GP for STATE TAX ,High Court for the State of Telanganaat Hyderabad. [OUT]

9. Two CD Copies

HIGH COURT
DATED:30/04/2025

ORDER

WP.No.9271 of 2O2S

DISPOSING THE WRIT PETITION
WITHOUT COSTS