Facts of the Case

M/S Akshat Travels Solutions challenged an order dated 03.08.2024 cancelling its GST registration under Section 29(2)(d) of the GST Act, as well as the appellate order dated 27.09.2025 dismissing its appeal as beyond limitation. The petitioner's case was that no opportunity of hearing was granted before the cancellation order was passed, that the powers under Section 29(2) are discretionary and cannot be exercised mechanically, and that the cancellation was ex parte since the petitioner could not submit a reply due to a medical issue.

Issues Involved

  1. Whether the order cancelling registration under Section 29(2)(d), passed without disclosing any application of mind or reasons, could be sustained.
  2. Whether the dismissal of the appeal on limitation grounds precluded challenge to the underlying cancellation order for want of reasons.

Petitioner's Arguments

  • No opportunity of hearing was granted prior to cancellation; the discretionary power under Section 29(2) cannot be exercised mechanically, and the order was ex parte as the petitioner could not reply owing to a medical issue.
  • Even though the Appellate Authority lacks power to condone delay under Section 107(4), the underlying cancellation order — being patently ex parte and devoid of reasons — remained open to challenge, since the doctrine of merger does not apply where the appeal has not been decided on merits, relying on Whirlpool Corporation v. Registrar of Trademarks, Mumbai and Ors. (1998) 8 SCC 1.
  • Reliance was placed on the coordinate Bench decision in M/s Chandra Sain v. Union of India and Ors. (Writ Tax No.147 of 2022), which held that a quasi-judicial cancellation order affecting the Article 19 right to carry on business must disclose reasons to satisfy Article 14, and on Om Prakash Mishra v. State of U.P. & Ors. (Writ Tax No.100 of 2022), holding that reasons are the heart and soul of any administrative or judicial order.

Respondent's Arguments

  • The Standing Counsel submitted, based on instructions, that an opportunity had been granted but was not availed by the petitioner, and that the petitioner had itself stated it did not want a hearing.

Court Order / Findings

  • The Court examined the impugned order dated 03.08.2024 and found that it disclosed no reasons for the harsh action of cancelling the registration.
  • Following Chandra Sain, the Court held that an order without application of mind does not satisfy the test of Article 14 of the Constitution, and accordingly set aside the impugned cancellation order.
  • Consequently, both the order dated 03.08.2024 and the appellate order dated 27.09.2025 were quashed.
  • The petitioner was directed to file its reply to the show cause notice within three weeks, following which the adjudicating authority was to pass a fresh order after affording an opportunity of hearing and considering the petitioner's defence.

Important Clarification

  • A GST registration cancellation order under Section 29(2), being a quasi-judicial order with a serious impact on the taxpayer's right to carry on business under Article 19, must disclose reasons reflecting application of mind; an order that fails this test is void for violating Article 14 and remains open to challenge notwithstanding a subsequent time-barred dismissal of the appeal, since the doctrine of merger does not operate where the appeal was never decided on merits.

Sections Involved

  • Section 29(2)(d) of the CGST/UPGST Act, 2017 — empowers cancellation of GST registration on specified grounds, exercised here without recorded reasons.
  • Section 107(4) of the CGST Act, 2017 — prescribes the outer limit for condonation of delay in filing an appeal, held not to bar a fresh challenge to a reasons-less order.

Decision – In Favour of

Assessee. Both the cancellation order and the appellate dismissal were quashed, with the matter remanded for a fresh, reasoned order after hearing.

Case Details

High Court of Judicature at Allahabad, Lucknow Bench; Writ Tax No. 1104 of 2025; Coram: Justice Jaspreet Singh; Order dated 15.10.2025.

Link to Download the Order

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