Reasoned GST registration cancellation orders are mandatory; unexplained cancellation without proper notice was set aside.

Cancellation of GST registration under the CGST Act and Rules must follow the prescribed procedure, including proper notice, consideration of the taxpayer's reply, and a reasoned speaking order in the prescribed form. An order that merely states no reply was filed and returns were not furnished, without disclosing the basis for cancellation or showing application of mind, does not satisfy statutory requirements or fair procedure. The Gauhati HC held that such a cancellation order was unsustainable and set it aside, remitting the matter to the show-cause notice stage for fresh consideration in accordance with law.

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Issues: Whether the order cancelling GST registration was liable to be set aside for want of reasons and non-compliance with the prescribed procedure under the CGST Rules.

Analysis: Cancellation of registration under Section 29 of the Central Goods and Services Tax Act, 2017 read with Rule 22 of the Central Goods and Services Tax Rules, 2017 requires observance of the prescribed procedure, including issuance of notice, consideration of reply, and passing of a reasoned order in the prescribed form. A cancellation order affecting civil rights must be a speaking order and must disclose application of mind. The impugned order merely recorded that no reply had been filed and that returns were not furnished, without assigning any proper reason or setting out the basis for cancellation. The notice itself also lacked sufficient particulars of the alleged default. Such an order falls short of the statutory requirement and the principles of fair procedure.

Conclusion: The cancellation order was unsustainable and was set aside and quashed. The matter was remitted to the stage of the show-cause notice for fresh consideration in accordance with law.

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