GST registration cancellation challenged for non-speaking REG-19 order; cancellation set aside, matter remitted for fresh reasoned decision.

Cancellation of GST registration was challenged on the ground that the proper officer issued an SCN but cancelled registration in Form GST REG-19 without a reasoned discussion, thereby breaching principles of natural justice. The HC held that an order affecting civil consequences must reflect application of mind and address the material issues; mere reference to the SCN and non-filing of reply could not justify a non-speaking cancellation order. The impugned cancellation was set aside and the matter was remitted to the proper officer to pass a fresh order on merits within a short time frame.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the cancellation of GST registration, based on allegations of fraud/suppression and non-existence of business at the declared place, was vitiated for want of proper discussion and reasoned consideration in the cancellation order.

(ii) Whether the appellate rejection of the challenge to cancellation could stand when the underlying cancellation order itself lacked proper discussion, warranting remand to the proper officer with directions to provide due notice and decide on merits.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of cancellation order in light of absence of proper discussion

Legal framework (as reflected in the judgment): The cancellation was stated to be grounded on Section 29(2)(e) and Rule 21(a), and was preceded by a show cause notice; the proper officer recorded that no reply was filed and personal hearing was not attended.

Interpretation and reasoning: The Court compared the stated reasons in the show cause notice and the cancellation order and found that, despite reciting the statutory grounds and noting non-response, the proper officer cancelled the registration without proper discussion. The Court treated the lack of reasoned consideration in the cancellation order as a material infirmity affecting the legality of the decision-making process.

Conclusion: The cancellation order was not allowed to stand; the matter was remitted to the proper officer to pass a fresh order on merits.

Issue (ii): Sustainability of appellate order and appropriate relief

Legal framework (as reflected in the judgment): The appellate authority rejected the appeal, primarily noting failure to reply to the show cause notice and stating that documents produced were "not found correct".

Interpretation and reasoning: Since the Court found the original cancellation order to be passed without proper discussion, it considered it necessary that the proper officer re-adjudicate the matter on merits after providing procedural fairness. The Court therefore directed remand to the proper officer, rather than sustaining the appellate rejection.

Conclusions and directions: The Court remitted the case to the proper officer to pass a fresh order on merits expeditiously, preferably within 15 days from receipt of the order. The Court further directed that due notice must be given to the petitioner before passing the fresh order. The writ petitions were disposed of on these terms, with no order as to costs.

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