Retrospective GST registration cancellation requires a speaking order and hearing before fresh decision on the taxpayer's reply.

Retrospective cancellation of GST registration cannot be sustained when the order is issued in a prescribed format without reasons. The authority must consider the taxpayer's reply, give a personal hearing, and pass a speaking order explaining why the reply is rejected and why retrospective cancellation is warranted. Because those requirements were not met, the cancellation order was set aside and the matter was remanded for fresh decision after hearing and consideration of the materials.

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Issues: Whether the order cancelling GST registration with retrospective effect, passed in statutory form without recording reasons, could be sustained.

Analysis: The appellants had submitted a reply to the show cause notice, but the cancellation order was issued in a prescribed format without reasons indicating why the reply was rejected or why retrospective cancellation from an earlier date was warranted. Since retrospective cancellation may entail serious consequences, the authority was required to pass a speaking order, consider the reply, afford personal hearing, and deal with the documents produced before taking a fresh decision.

Conclusion: The cancellation order was set aside and the matter was remanded to the original authority for fresh decision after personal hearing and consideration of the materials.

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