GST registration cancellation set aside for non-application of mind and denial of an effective opportunity of hearing.

GST registration cancellation was held unsustainable where the authority's order was internally inconsistent, recording both absence of a response and an alleged reply that had been examined. That discrepancy indicated non-application of mind to the material on record, and the cancellation was also made without an effective opportunity of hearing on the show cause notice. The order was set aside, and the taxpayer was allowed to file a reply, after which the authority must decide the matter afresh after granting hearing.

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Issues: Whether the order cancelling the GST registration was liable to be set aside for non-application of mind and denial of a fair opportunity before cancellation.

Analysis: The cancellation order was found to be internally inconsistent, as it recorded both the absence of a response and the existence of a reply dated 08.02.2023 that was allegedly examined. This discrepancy showed that the authority had not applied its mind to the material before it. The order was also passed without granting an effective opportunity of hearing on the show cause notice, making the decision unsustainable.

Conclusion: The cancellation order was set aside, and the petitioner was permitted to file a reply to the show cause notice, after which the authority was directed to decide the matter afresh after giving an opportunity of hearing.

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