Reasoned GST cancellation orders are mandatory; a non-speaking order violating natural justice was set aside despite delay.

Cancellation of GST registration, which carries adverse civil consequences, must comply with the prescribed procedure and principles of natural justice. A show-cause notice must clearly state the proposed grounds so the registered person can meaningfully respond, and the final cancellation order must be a speaking order showing application of mind; a bare reference to the notice and a generic remark are insufficient. The cancellation order was therefore held non-speaking, arbitrary, and contrary to Rule 22 of the CGST Rules, 2017, and was set aside. Although the writ petition was filed belatedly, the delay did not bar relief because the defect in the impugned order went to its legality, and the matter was restored to the show-cause stage.

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Issues: (i) Whether the order cancelling GST registration was vitiated for want of reasons and non-compliance with the prescribed cancellation procedure; (ii) Whether the petitioner's delayed approach to the Court disentitled him to relief.

Issue (i): Whether the order cancelling GST registration was vitiated for want of reasons and non-compliance with the prescribed cancellation procedure.

Analysis: Cancellation of registration under the GST regime carries adverse civil consequences and therefore requires compliance with the statutory procedure and fair decision-making. The notice under the cancellation provisions must disclose the precise basis of proposed action so that the registered person can give an effective reply. The cancellation order must also be a speaking order in the prescribed form, with specific reasons showing application of mind. A bare reference to the notice and a generic remark without reasons does not satisfy the requirement of Rule 22 of the CGST Rules, 2017 or the requirement inherent in fair procedure.

Conclusion: The cancellation order was held to be non-speaking, arbitrary, and contrary to the prescribed procedure, and was set aside in favour of the petitioner.

Issue (ii): Whether the petitioner's delayed approach to the Court disentitled him to relief.

Analysis: Although the writ petition was filed after a substantial lapse of time, the defect in the cancellation order went to the root of legality because it was passed without reasons and without due application of mind. In such circumstances, the procedural lapse in approaching the Court late did not outweigh the illegality in the impugned order.

Conclusion: The delay did not bar relief, and the Court granted interference in favour of the petitioner.

Final Conclusion: The cancellation order was quashed and the matter was restored to the stage of the show-cause notice, with liberty to the petitioner to respond or regularise the dues in accordance with the GST procedure.

Ratio Decidendi: An order cancelling GST registration must be reasoned and passed in strict conformity with the statutory procedure and principles of natural justice; a non-speaking cancellation order affecting civil rights is liable to be set aside.

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