Reasoned GST cancellation orders and lapse of statutory bank attachment determine registration and account restoration

An order cancelling GST registration cannot be sustained when it records no reasons and is passed without following the prescribed procedure; the cancellation was quashed and the matter remanded for fresh consideration in accordance with law. Where a bank account attachment under the GST regime had already ceased by operation of the statutory scheme, no subsisting restraint could continue, and the account had to be restored to operation; the attachment was treated as having lapsed and the bank account was directed to be made operational forthwith.

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Issues: (i) Whether the order cancelling the petitioner's GST registration was liable to be quashed for want of reasons and observance of the prescribed procedure, and (ii) whether the bank account attachment had lapsed by operation of law under the GST provisions.

Issue (i): Whether the order cancelling the petitioner's GST registration was liable to be quashed for want of reasons and observance of the prescribed procedure.

Analysis: The impugned cancellation order did not record reasons. The challenge was confined to the cancellation order, and the absence of reasons showed non-compliance with the requirement that such a serious civil consequence be preceded by a reasoned decision and adherence to the prescribed process. In these circumstances, the cancellation could not be sustained and the matter required reconsideration by the designated officer after following due process.

Conclusion: The cancellation order was quashed and set aside, and the proceedings were remanded for fresh action in accordance with law.

Issue (ii): Whether the bank account attachment had lapsed by operation of law under the GST provisions.

Analysis: The attachment was stated to have been imposed under the GST regime, but it had already lapsed in view of the statutory operation of the attachment provision. Once the attachment ceased by operation of law, there was no subsisting restraint on the bank account and the account was required to be restored to operation.

Conclusion: The attachment was held to have lapsed, and the petitioner's bank account was directed to be made operational forthwith.

Final Conclusion: The petition succeeded in part: the cancellation of registration was set aside and remitted for fresh consideration, while the bank account attachment was treated as having lapsed, with consequential restoration of banking operations.

Ratio Decidendi: An order cancelling GST registration must be supported by reasons and due procedure, and an attachment that has ceased under the statutory scheme cannot continue to bind the assessee's bank account.

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