GST registration cancellation without reasons violates natural justice and was set aside for reconsideration.

An order cancelling GST registration must record reasons and comply with natural justice; a non-speaking cancellation order that neither states the grounds nor even refers to the notice is legally unsustainable. Because cancellation has civil and penal consequences, the prescribed procedure requires disclosure of reasons even where the taxpayer does not appear or file objections. The Patna HC therefore set aside the cancellation and remitted the matter for reconsideration in accordance with law.

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Issues: Whether an order cancelling GST registration without recording reasons could be sustained and whether it was liable to be set aside for reconsideration.

Analysis: The cancellation order was found to be non-speaking and did not state any reason for cancellation or even refer to the subject of the notice. Under the GST registration cancellation procedure, the prescribed form requires reasons to be specified, and the absence of reasons showed a misconception that no reasons were necessary where the assessee did not appear or file objections. Such an order was held to be legally unsustainable, particularly because cancellation carries civil and penal consequences and must comply with the requirements of natural justice.

Conclusion: The cancellation order could not be sustained and was set aside for reconsideration. The writ petition was allowed.

Final Conclusion: The impugned cancellation of registration was invalid for want of reasons and was quashed, with the matter directed to be reconsidered in accordance with law.

Ratio Decidendi: A cancellation of GST registration that is non-speaking and fails to disclose reasons is vitiated for breach of natural justice and cannot be sustained.

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