Allahabad HC Sets Aside GST Registration Cancellation Orders, Remands Matter for Fresh Hearing

Is it fair to cancel GST registration without explaining why? In the current case, the GST department cancelled the GST registration of an individual without giving any legal reason. The High Court discovered that the cancellation of GST registration was done without explaining why, which is legally unfair. Additionally, even though the appeal was rejected as late, the Court still protected the petitioner’s rights by cancelling both orders and sending the case back to the GST officer for a fair and fresh hearing. Now, the department is being ordered to listen to the petitioner properly and issue a reasoned decision. The judgement was passed on July 15, 2025.

The present writ petition (Writ Tax Petition No. 616 of 2025) is being filed by a firm named M/S Palak Enterprises (petitioner) against the State of U.P. (respondent) in the Allahabad High Court, challenging two orders dated 23.09.2023 and 11.06.2025. The first order was issued to cancel the GST registration of the company, and the second order was issued to dismiss the appeal filed by the company against the GST registration cancellation order, saying it was beyond the legal deadline. The company argued that the GST registration cancellation order does not give any specific and clear reason. In legal terms, this kind of order is called a “non-speaking order.”

To pass the final orders, the High Court took reference from a previous judgement titled M/s Chandra Sain, Sarda Nagar, Lucknow Thru. Its Proprietor v. U.O.I & Ors. (Writ Tax No. 147 of 2022) was decided on 22.09.2022. This case was also based on the same situation where the passed orders were “non-speaking orders.” In that case, the High Court quashed the GST Registration cancellation order, saying it must include a proper reason. If they don’t, it means they are legally flawed.

The Allahabad High Court noted that the GST cancellation order dated 23.09.2023 was non-speaking, issued without giving any logical explanation or basis, which is not acceptable in law. Therefore, adopting the same reasoning as in the M/s Chandra Sain case, the Court decided in favour of the petitioner and allowed the writ petition. The Court set aside both the challenged orders dated 23.09.2023 and 11.06.2025 and remanded the case back to the assessing authority for a fresh hearing to pass a new order in accordance with the law, this time with proper reasoning and explanation.