Reasoned GST cancellation orders required; a non-speaking registration cancellation was quashed for breach of natural justice.

A GST registration cancellation order must be reasoned and must address the show-cause notice and reply before adverse action is taken. Rule 22(3) of the Bihar GST Rules, 2017 requires a speaking order in Form GST REG-19 recording the grounds for cancellation, and an order with civil and penal consequences cannot rest on a cryptic or non-speaking conclusion. As the impugned cancellation contained no reasons and did not even refer to the subject of the notice, it breached natural justice and was unsustainable. The cancellation was set aside and the matter remitted for reconsideration.

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Issues: Whether the order cancelling GST registration was vitiated for want of reasons and consequent violation of natural justice.

Analysis: The cancellation order did not state any reason and did not even refer to the subject of the show-cause notice. Rule 22(3) of the Bihar Goods and Services Tax Rules, 2017 contemplates a reasoned order in Form GST REG-19, including the grounds for cancellation. An order cancelling registration carries civil and penal consequences, and the authority was required to examine the notice and reply and record reasons before cancelling registration. A cryptic or non-speaking cancellation order is therefore unsustainable.

Conclusion: The cancellation order was invalid and was set aside with a direction for reconsideration, in favour of the petitioner.

Final Conclusion: The writ petition succeeded, and the impugned cancellation of registration was quashed for non-recording of reasons and breach of natural justice.

Ratio Decidendi: A cancellation of GST registration that affects civil and penal consequences must be supported by reasons in the prescribed form, and a non-speaking order is liable to be set aside for violation of natural justice.

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