Reasoned GST cancellation orders are mandatory; non-speaking cancellation violates natural justice, while extended revocation may remain available.

A GST registration cancellation order must record reasons and show consideration of the show-cause notice and reply; a cryptic non-speaking order violates natural justice and is unsustainable because cancellation has civil and penal consequences. The Patna HC set aside the cancellation and directed reconsideration. The note also records that, where registration was cancelled for non-filing of returns, the extended revocation remedy may be available if the statutory conditions are met, including filing returns up to the effective date of cancellation and payment of tax, interest, penalty and late fee.

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Issues: (i) Whether the cancellation of GST registration by a non-speaking order, without recording reasons or referring to the show-cause notice and reply, was legally sustainable; (ii) Whether the registered person could avail the extended remedy for revocation of cancellation where registration had been cancelled for non-filing of returns.

Issue (i): Whether the cancellation of GST registration by a non-speaking order, without recording reasons or referring to the show-cause notice and reply, was legally sustainable.

Analysis: The cancellation order did not state any reason for cancellation and did not even refer to the subject of the notice. The prescribed cancellation form under Rule 22(3) of the Bihar Goods and Services Tax Rules, 2017 requires reasons to be assigned. An order cancelling registration has civil and penal consequences and must disclose the basis of the decision. A cryptic order which does not reflect consideration of the notice or response violates natural justice.

Conclusion: The cancellation order was unsustainable and was set aside, with a direction for reconsideration.

Issue (ii): Whether the registered person could avail the extended remedy for revocation of cancellation where registration had been cancelled for non-filing of returns.

Analysis: The decision noticed the subsequent GST notification extending the time to apply for revocation where cancellation had been made for failure to file returns under section 29(2)(b) or section 29(2)(c). The remedy was treated as available subject to the stated statutory conditions, including filing of returns up to the effective date of cancellation and payment of tax, interest, penalty and late fee.

Conclusion: The registered person was held entitled to avail the extended revocation remedy, subject to compliance with the stated conditions.

Final Conclusion: The writ petition succeeded to the extent that the cancellation order was quashed and the matter was sent back for reconsideration, while the statutory revocation remedy was recognised as available if the prescribed conditions were satisfied.

Ratio Decidendi: A GST registration cancellation order that does not disclose reasons or show application of mind to the show-cause notice and reply is invalid for breach of natural justice and cannot be sustained.

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