High Court Sets Aside GST Registration Cancellation for Lack of Reasons and Hearing

M/s M.S.K. Brick Field, through its proprietor Mohammad Shakeel Khan, challenged the order dated 05.03.2026 cancelling its GST registration under Section 29(2)(b) of the GST Act and the appellate order dated 06.01.2026 dismissing its appeal as time-barred.

The petitioner contended that no opportunity of hearing was granted before cancellation and that the power under Section 29(2) was exercised mechanically without reasons. It was submitted that returns for two quarters of FY 2024-25 could not be filed due to severe illness and that the default was not intentional.

Main Issue: Whether the cancellation of GST registration without reasons and without granting an opportunity of hearing is legally sustainable when the appeal was dismissed solely on limitation.

HC Ruled: The HC held that cancellation of registration, being a serious consequence affecting business rights, must be supported by reasons and should show application of mind, as earlier emphasised in M/s Chandra Sain v. Union of India.

The Court found that the cancellation order contained no reasons and was a non-speaking order, thus violating principles of natural justice and Article 14 of the Constitution. The appellate authority had also erred in dismissing the appeal merely on limitation without addressing the substantive grievance.

Hence, both the cancellation order and the appellate order were quashed. The petitioner was directed to file a reply to the show cause notice within three weeks, and the adjudicating authority was directed to pass a fresh, reasoned order after granting proper opportunity of hearing. The writ petition was allowed.

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