GST registration cancellation without stated reasons-order set aside for being non-speaking, remitted for fresh hearing and reasons.

The dominant issue was whether cancellation of a taxpayer's GST registration was vitiated for want of reasons. The HC held that the cancellation order recorded no reasons at all, despite having severe civil consequences, and therefore failed the requirement that administrative/quasi-judicial orders disclose at least brief reasons; such non-speaking action was arbitrary and offended Article 14. Accordingly, the cancellation order was set aside and the matter remitted with a direction to the taxpayer to respond to the show-cause notice and for the authority to pass a fresh reasoned order after granting hearing. The challenge to the appellate order was rejected.

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Issues: Challenge to cancellation of firm's registration under section 29 of CGST Act and dismissal of appeal under section 107(4) of the Act.

Cancellation of Firm's Registration under Section 29:
The petitioner challenged the cancellation of their firm's registration under section 29 of the CGST Act, arguing that the order lacked a show cause notice and an opportunity for a hearing. The counsel contended that the order was arbitrary, lacked reasoning, and did not reflect any application of mind. The petitioner's appeal was filed beyond the prescribed period due to medical emergencies, and the authorized representative holding the registration information had passed away. The counsel emphasized the need for the order to be subject to judicial review for non-observance of the principle of natural justice. The Standing Counsel argued that the authority had taken steps for compliance with natural justice, but the petitioner failed to respond to the show cause notice or attend the hearing.

Dismissal of Appeal under Section 107(4):
The appeal was dismissed as being beyond the limitation period, with the petitioner citing medical emergencies as the reason for the delay. The Standing Counsel contended that all efforts for compliance were made by the authority, and the appeal was filed late. The court considered the absence of the appellate tribunal as prescribed under the Act and evaluated the validity of both challenged orders. The court accepted the petitioner's argument against the cancellation order, noting the lack of reasons recorded for canceling the registration, which violated the principles of natural justice and Article 14 of the Constitution of India. The court set aside the cancellation order, directing the petitioner to respond to the show cause notice for a fresh decision with an opportunity for a hearing.

In conclusion, the court allowed the writ petition, setting aside the cancellation order and consequently the appellate order. The judgment emphasized the importance of providing reasons for administrative or quasi-judicial decisions to ensure compliance with legal principles and constitutional rights.

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