GST registration cancellation requires real evidence of non-functionality; a single inspection and presumption were insufficient.

GST registration cancellation cannot rest on a single inspection or a bare presumption that the business is non-functional when the record shows continued transactions, nameplate display, and return filings. Where revocation was refused and the appeal also failed on that same unsupported basis, those orders were set aside and registration restored. The reasoning treats adverse civil consequences from cancellation as requiring a substantive factual foundation, not a hurried inference from one visit to the premises.

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Issues: Whether cancellation of GST registration could be sustained merely on the basis of a single inspection and a presumption that the firm was non-functional, and whether the orders rejecting revocation and appeal were liable to be set aside with restoration of registration.

Analysis: The order records that the cancellation was founded only on the Inspector's inability to find the person at the office premises on one occasion, despite the nameplate being displayed and business transactions and return filings continuing. Such a presumption of non-functionality was held to be unsustainable, and the action was found to have been taken in haste. The reasoning follows the approach adopted in the cited precedent concerning cancellation and revocation of registration under the CGST Rules, where adverse civil consequences arising from cancellation were treated as significant.

Conclusion: The cancellation order, the order rejecting revocation, and the appellate order were set aside, and the petitioner's GST registration was restored.

Ratio Decidendi: GST registration cannot be cancelled or kept cancelled merely on a solitary inspection-based presumption of non-functionality when the material on record shows continued business activity and compliance.

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