Patna HC Quashes GST Cancellation Order, Holds Fair Hearing Essential Under Natural Justice

A 38-year-old Prakash Kumar (petitioner) filed the present writ petition in the Patna High Court, claiming that the tax authorities had erroneously cancelled his GST registration without granting a proper opportunity of hearing, indicating an explicit violation of the principles of natural justice.

The tax authorities had issued a show cause notice (SCN), dated July 08, 2024, to the petitioner on the grounds of non-filing of the GST returns for six months, for which he was granted a time limit of 30 days to respond. It was further submitted that the impugned SCN was itself defective because the date scheduled for a personal hearing was prior to the date chosen to file a response.

Additionally, the petitioner claimed that the GST registration cancellation order dated August 08, 2024, was non-speaking and was issued without granting a proper opportunity to explain, reflecting a violation of the principles of natural justice. On this, the tax authorities claimed that the petitioner was granted sufficient time to explain; however, he failed to respond within the required time limit. The petitioner later sought GST revocation; however, the application for the same was rejected on the grounds of delayed filing. Thereafter, the petitioner approached the Patna High Court.

After analysing the complete case, the High Court noted that the tax authorities had not properly examined the case before issuing the GST cancellation order and had acted in haste. The Court stated that merely giving an opportunity is not enough; the opportunity must also be fair and adequate.

Consequently, the high court quashed the impugned GST cancellation order and restored the initial show cause notice, granting the petitioner an extra time of 30 days (from the day of receiving the present order, i.e., May 11, 2026) to respond. Thereafter, the tax authorities must provide a proper hearing and pass a reasoned/justified order within four months.

The court held, “We, therefore, set aside the impugned order (Annexure-P2). As a consequence of setting aside of AnnexureP2, the order, as contained in Annexure-P1, shall stand revived. The petitioner must file his response before the competent authority within a period of 30 days from today, whereafter the competent authority shall fix a date of hearing. On the date of hearing, the petitioner shall appear either himself or through his authorized representative and make his submissions. Thereafter, the competent authority shall pass a reasoned order. All these exercise be completed within a period of four months from today.”