Patna High court grants liberty to Pursue Statutory Appeal instead of setting aside GST cancellation order

The assessee pushed back against the cancellation of its GST registration, saying it happened without a fair hearing and that the order offered no explanation. The Patna High Court didn’t dig into whether the cancellation was actually justified. Instead, they gave the assessee permission to appeal under Section 112 of the CGST Act and wrapped up the writ petition.

Fact of the case

M/s Vaishnavi Builder and Developer, who started the case, went to the Patna High Court after their GST registration was canceled. According to them, the department issued a Show Cause Notice on May 9, 2023. Later on an order dated January 15, 2024 canceled the registration. Their complaint was that the cancellation was made without giving them a meaningful opportunity to present their case, which they viewed as unfair.

The company also contended that the cancellation order did not explain the reasons for taking such a step. In their view, an order affecting their registration should contain clear grounds and justification. They further stated that they had been filing GST returns and paying the applicable taxes, including late fees, up to December 2023. Once the registration was cancelled, however, they were no longer able to continue filing returns. On that basis, they sought restoration of the registration and requested permission to submit a delayed application so they could regularise compliance and move forward.

Issues:

Whether the GST registration could be cancelled in this manner—through what they described as a one-sided order without a proper hearing

Whether they should receive relief in the form of restoration or an opportunity to apply for revocation and complete pending filings.

Court Observation

The Patna High Court did not examine the merits of the cancellation itself or make findings as to whether the order was justified. Instead, the court focused on the availability of an alternative statutory remedy. It was noted that Section 112 of the CGST Act of 2017 provides a mechanism to challenge the order starting June 20, 2025. In light of that remedy, the court considered it more appropriate for the company to pursue the route provided under the statute rather than have the High Court address the dispute directly at this stage.

Judgement

Ultimately, the Patna High Court disposed of the petition. It granted M/s Vaishnavi Builder and Developer liberty to challenge the cancellation order before the competent authority in accordance with Section 112. The court did not set aside the cancellation order and did not direct restoration of the GST registration.