Illegal Registration Cancellation Overturned: Authorities Must Provide Substantive Reasoning and Allow Proper Response Under CGST Act Section 29

HC found the registration cancellation under CGST Act Section 29 illegal due to lack of substantive reasoning. The court set aside the order and directed the adjudicating authority to reconsider the case, allowing the petitioner to file a reply to the show cause notice within three weeks and requiring the respondent to issue a fresh order in compliance with legal principles.

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Issues:
Challenge to cancellation of registration under Section 29 of CGST Act and dismissal of appeal on the ground of limitation.

Analysis:
The petitioner, engaged in manpower supply business, challenged the cancellation of registration under Section 29 of the CGST Act and the dismissal of the appeal. The petitioner failed to respond to a show cause notice due to personal reasons, leading to the cancellation of registration. The petitioner contended that the cancellation was unjust as no reasons were provided in the order for cancellation other than non-response to the notice. The petitioner argued that the authority should have considered the circumstances before cancelling the registration under Section 39 of the CGST Act.

The petitioner, unable to appeal before the GST Tribunal due to its non-constitution in Uttar Pradesh, sought judicial review. The petitioner claimed that the dismissal of the appeal beyond the limitation period warranted judicial review as the order was non-speaking. Referring to a previous judgment, the petitioner argued that orders lacking reasons or application of mind do not uphold constitutional scrutiny under Article 14. The Court observed that the impugned order lacked reasons for cancellation other than non-response to the notice, emphasizing the authority's duty to consider the case's facts before cancellation under Section 39 of the CGST Act.

Consequently, the Court deemed the cancellation order illegal and set it aside. The matter was remitted to the adjudicating authority with directions for the petitioner to file a reply to the show cause notice within three weeks. Upon submission of the reply along with a copy of the order, the respondent was instructed to issue a fresh order in compliance with the law.

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