Allahabad High Court Says GST Registration Cancellation Without Reasons Should Be Quashed

In a recent appeal before the Allahabad High Court, S.R. Contractor Construction and Suppliers challenged two orders, one by which its GST registration was cancelled and the second by which its statutory appeal was dismissed as time-barred.

The petitioner contended that the cancellation order assigned no reasons whatsoever, making it arbitrary and unsustainable. It was also contended that the appellate authority rejected the appeal purely on the ground of delay without examining the merits, causing the petitioner to remain remediless.

Central Issue: Whether GST registration can be cancelled without assigning reasons, and whether such cancellation can survive despite dismissal of the appeal on grounds of latches.

HC Decided: The High Court held that the cancellation order was unsustainable as it contained no reasons. The Court reaffirmed the view expressed in M/s World Solution that non-speaking cancellation orders cannot stand and that, where the appeal is dismissed solely on delay, the doctrine of merger does not apply. Thus, both the cancellation order and the appellate order were quashed.

The authorities were granted liberty to issue a fresh show-cause notice, to which the petitioner must respond within three weeks of receipt. The adjudicating authority was directed to pass a reasoned and speaking order after granting an opportunity of hearing and considering the petitioner’s defence, within one month thereafter. The writ petition was allowed.

To Read Full Judgment, Download PDF Given Below