Facts of the Case

The petitioner, Skva Rubber Solution Private Limited, a company trading in crumb rubber granulate, obtained GST registration No.27AAYCY5660F1ZQ on 09.07.2018 in Maharashtra. Due to financial difficulties in 2018-19, it could not discharge tax liability and failed to file returns, leading to a show cause notice in Form GST REG-17 dated 31.12.2020 suspending its registration, and eventually cancellation on 02.02.2021, with effect from 01.05.2019, without any personal hearing. To avail the amnesty scheme under Notification No.3 of 2023, the petitioner filed pending returns up to March 2019 and, on 30.06.2023, applied for revocation of cancellation disclosing a GST liability of Rs.2,97,102/-. This application was rejected by order dated 30.08.2023 without considering the petitioner's reply and supporting documents. The subsequent appeal, filed on 19.03.2024, was rejected on the ground of limitation.

Issues Involved

  1. Whether a GST registration cancellation order passed without affording an opportunity of personal hearing is void ab initio and non est in law.
  2. Whether an appeal against rejection of a revocation application can be dismissed purely on limitation when the underlying cancellation order itself is void.
  3. Whether non-speaking orders lacking reasons for cancellation or rejection of revocation can be sustained.

Petitioner's Arguments

  • The petitioner argued that the cancellation of registration was arbitrary as no opportunity of personal hearing was granted, violating principles of natural justice and rendering the order dated 02.02.2021 unsustainable.
  • It was contended that the Appellate Authority's order dated 31.07.2024, rejecting the appeal on the ground of delay, was itself bad in law because the underlying cancellation order was void ab initio and non est, so limitation could not bar relief.
  • Reliance was placed on this Court's decision in K-Line India Pvt. Ltd. v. Union of India, holding that an assessee should not suffer for a too-pedantic application of limitation when the foundational order is illegal.

Respondent's Arguments

  • The State submitted that the registration was cancelled on valid grounds — the petitioner's place of business was found non-operational and it had failed to discharge tax liability and file returns within time — and opposed the reliefs sought.

Court Order / Findings

  • The Court held that the cancellation of registration, and the subsequent rejection of the revocation application, did not reflect due consideration of the petitioner's submissions and were passed in breach of natural justice, particularly the absence of a personal hearing, rendering them void ab initio and non est in law.
  • The Appellate Authority's rejection of the appeal solely on the ground of limitation, without examining the underlying illegality, was held to be an unduly pedantic approach unwarranted in matters of registration cancellation, which carry serious civil consequences.
  • Following its earlier rulings including K-Line India, Makersbury India, Monit Trading, C.P. Pandey & Co., Ramji Enterprises, Nirakar Ramchandra Pradhan and Afzal Hussain Saiyed, the Court reiterated that non-speaking orders passed without hearing are liable to be quashed.
  • The show cause notices dated 31.12.2020 and 27.07.2023, and the consequential orders dated 02.02.2021 and 30.08.2023, were quashed; the Department was granted liberty to initiate fresh proceedings, to be adjudicated after a personal hearing and a reasoned order within three months, with all contentions of parties kept open.

Important Clarification

An appeal against a GST registration cancellation (or against rejection of a revocation application) cannot be dismissed purely on the ground of limitation where the underlying order itself is void ab initio for want of a personal hearing or reasons. Courts will look past a technical limitation bar to examine whether the foundational administrative action itself withstands scrutiny under natural justice.

Sections Involved

  • Section 29, CGST Act, 2017 — governs cancellation and revocation of cancellation of GST registration.
  • Section 107, CGST Act, 2017 — the statutory appeal provision, including the limitation period considered (and found inapplicable to bar relief) in this case.
  • Form GST REG-17 and REG-21 — forms for suspension/proposed cancellation and for applying for revocation of cancellation respectively.
  • Notification No.3 of 2023 — the amnesty scheme allowing filing of pending returns to enable revocation of cancelled registrations.

Decision – In Favour of

The decision is in favour of the Assessee. Both the cancellation order and the rejection of the revocation application were quashed, with the matter remanded for fresh adjudication after a proper hearing.

Case Details

Court: High Court of Judicature at Bombay
Case No.: Writ Petition No. 17755 of 2024
Coram: Justice G. S. Kulkarni and Justice Aarti Sathe
Date of Order: 23.04.2026

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