Reasoned GST registration cancellation and effective hearing are mandatory; unreasoned cancellation and appellate orders require fresh adjudication.

Cancellation of GST registration must satisfy Article 14's requirement of non-arbitrariness because it adversely affects the right to carry on business. An order cancelling registration must disclose reasons and demonstrate application of mind; a registrant must also receive an effective opportunity to reply to the show-cause notice and be heard. The text states that cancellation and the consequential appellate order, having lacked these requirements, were unsustainable and set aside. Fresh adjudication is to occur after the registrant's reply is received and its defence is considered at a hearing.

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Issues: Whether cancellation of GST registration and the consequential appellate order could stand where the cancellation was made without reasons or application of mind and without an effective opportunity to respond.

Analysis: Cancellation of registration adversely affects the right to carry on business and must satisfy the constitutional requirement of non-arbitrariness under Article 14 of the Constitution of India. The cancellation order did not disclose reasons warranting such action and reflected no application of mind. The petitioner was consequently entitled to submit a reply to the show-cause notice and have its defence considered after an opportunity of hearing.

Conclusion: The cancellation and appellate orders were unsustainable and were set aside in favour of the assessee, with fresh adjudication to follow after receipt of the petitioner's reply and hearing.

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