Natural justice in GST cancellation matters requires disclosure of all adverse material before registration can be withdrawn.

GST registration cancellation was quashed where the show cause notice alleged only continuous non-filing of returns, but the cancellation order was non-speaking and the appellate authority relied on a spot inspection report and other adverse material never disclosed to the assessee. Because the assessee had no opportunity to meet that material, the decision-making process was held contrary to natural justice and procedurally unfair. The cancellation and appellate orders were set aside, and registration was directed to be revived, with liberty to proceed again in accordance with law if tax, penalty and interest were not paid within the stipulated time.

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Issues: Whether the cancellation of GST registration and the appellate rejection thereof were liable to be quashed for violation of natural justice, particularly because the appellate authority relied on material not disclosed in the show cause notice.

Analysis: The show cause notice proposed cancellation only on the ground of continuous non-filing of returns for six months. The cancellation order was non-speaking, and the appellate authority relied upon a spot inspection report and other adverse material that had not been put to notice of the assessee. Since the assessee had no opportunity to meet that material, the decision-making process was held to be contrary to the principles of natural justice and procedurally unfair.

Conclusion: The cancellation order and the appellate order were quashed. The GST registration was directed to be revived, with liberty to the authority to act again in accordance with law if tax, penalty, and interest were not paid within the stipulated time.

Final Conclusion: The assessee succeeded on the short ground of breach of natural justice, and the adverse orders were set aside with restoration of registration.

Ratio Decidendi: An adverse order cannot be sustained when it is founded on material or grounds not disclosed in the show cause notice and not afforded to the affected party for rebuttal.

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