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Issues: (i) Whether the cancellation of GST registration could be sustained when the cancellation order contained no reasons and did not conform to the prescribed procedure; (ii) whether the writ petition should be rejected on the ground of delay despite the alleged statutory breach in the cancellation order.
Issue (i): Whether the cancellation of GST registration could be sustained when the cancellation order contained no reasons and did not conform to the prescribed procedure.
Analysis: Cancellation of registration under the CGST regime has adverse civil consequences and must conform to the statutory procedure under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017 read with Rule 22 of the Central Goods and Services Tax Rules, 2017. The prescribed form for cancellation requires the proper officer to record the reasons for cancellation. An order that merely notes non-response to notice or non-appearance, without disclosing the basis for the conclusion, is a non-speaking order and indicates absence of due application of mind. Recording reasons is part of fair procedure and an important safeguard against arbitrariness.
Conclusion: The cancellation order was unsustainable and was set aside in favour of the assessee.
Issue (ii): Whether the writ petition should be rejected on the ground of delay despite the alleged statutory breach in the cancellation order.
Analysis: Delay by itself did not justify refusing relief where the impugned order was found to suffer from a fundamental legal defect for want of reasons. The statutory infraction in the cancellation process was treated as outweighing the belated approach to the Court, particularly because the order affected the petitioner's ability to carry on business.
Conclusion: The petition was not defeated by delay and relief was granted in favour of the assessee.
Final Conclusion: The impugned cancellation was quashed, the matter was restored to the stage of show-cause notice, and the petitioner was given an opportunity to respond or regularise dues before fresh action in accordance with law.
Ratio Decidendi: An order cancelling GST registration must be a reasoned order passed in conformity with the statutory procedure, and absence of reasons vitiates the cancellation for want of application of mind and breach of fair procedure.
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