Facts of the Case

The petitioner, Dhruba Jyoti Saikia, was granted GST registration on 24.05.2018. Due to acute financial hardship, he could not file returns, and a show cause notice dated 15.01.2023 was issued under Section 39 of the CGST Act, 2017, simultaneously suspending his registration. On 28.02.2023, the Respondent cancelled the registration citing only the reason "Registration is cancelled" — with no reply from the petitioner on record and no other reasoning disclosed. The petitioner claimed to have since filed his pending returns and challenged the cancellation order by writ petition.

Issues Involved

  1. Whether a GST registration cancellation order that states only "Registration is cancelled" as its reason, without any further reasoning, discloses the total non-application of mind required to be set aside on judicial review.

Petitioner's Arguments

  • The cancellation order was passed by a quasi-judicial authority with civil consequences — depriving the petitioner of the ability to carry on business — yet gave no reason beyond restating that registration was cancelled.
  • The petitioner had, in the meantime, already filed his pending returns, a fact the authority ought to be able to consider.

Respondent's Arguments

  • No specific opposing submissions on the merits of the cancellation reasoning are recorded; the matter proceeded on the face of the impugned order and the record.

Court Order / Findings

  • The impugned order, being passed by a quasi-judicial authority with civil consequences for the petitioner's ability to carry on business, was required to disclose justifiable reasons.
  • Cancelling registration by giving the reason "Registration is cancelled" was found shocking and to show a total non-application of mind, apart from being devoid of any justifiable reasoning.
  • The impugned order dated 28.02.2023 was set aside, restoring the status of the registration to the date the show cause notice was issued (15.01.2023), and the petitioner was given liberty to file an additional reply within ten days bringing to notice the returns already filed and any other grounds, upon which the Respondent shall take due steps in accordance with law.

Important Clarification

A GST registration cancellation order, being the act of a quasi-judicial authority with civil consequences, must disclose reasons beyond a bare restatement that the registration stands cancelled; an order that merely says "Registration is cancelled" without engaging with the show cause notice, the reply (if any), or any subsequent compliance by the registrant reflects total non-application of mind and will be set aside, with the status restored to the show-cause-notice stage for a proper re-decision.

Sections Involved

  • Section 39, CGST Act, 2017 – requirement to furnish periodic returns, non-compliance with which can trigger show cause proceedings for cancellation.
  • Section 29(2), CGST Act, 2017 – grounds for cancellation of registration, including continuous default in filing returns.

Decision – In Favour of

In favour of the Assessee — the cancellation order was set aside for non-application of mind, with the registration's status restored to the show-cause-notice stage pending a fresh, reasoned decision.

Case Details

Gauhati High Court (High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh); WP(C)/5181/2023; Coram: Hon'ble Mr. Justice Devashis Baruah; Order dated 08.09.2023; CNR: GAHC010197302023.

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