GST Registration Cancellation Set Aside for Lack of Speaking Order

Case Reference:
M/s Lungphi Rankha Enterprise v. Union of India & Ors.
Court: Gauhati High Court
Petition No.: WP(C)/1771/2025
Category of Dispute: GST Registration Cancellation
Date of Judgment: 05.04.2025
Relevant Sections: Section 29(2)(c), Section 107 of CGST Act, 2017; Rule 22(3), 22(4), 21A of CGST Rules
Issue: Cancellation of GST registration due to non-filing of returns for 6 months

Facts of the Case (¶2 to ¶4, ¶6)

• The petitioner, a proprietorship firm, was registered under GST from 02.01.2019.

• On 14.11.2023, the department issued a Show Cause Notice (SCN) for cancellation of registration due to non-filing of GSTR-3B returns for over 6 months (¶3).

• The SCN was uploaded on the portal but not manually served; hence, the petitioner failed to respond (¶6).

• The GST registration was cancelled ex-parte via order dated 20.12.2023 without any reasoned explanation in FORM REG-19 (¶4, ¶17, ¶21).

Questions in Consideration (¶1, ¶6.1, ¶22)

• Whether the cancellation of GST registration without assigning specific reasons and issuing a non-speaking order is valid?

• Whether procedural lapse of the officer in issuing an unreasoned cancellation order outweighs the petitioner’s delayed approach to the Court?

Observations of the Court

• On Legal Procedure: Rule 22(3) mandates that cancellation orders under Section 29(2) must be in FORM REG-19 with specific reasons recorded (¶13–¶15).

• On Nature of Order: The impugned order dated 20.12.2023 was non-speaking and lacked any justification for cancellation, violating natural justice (¶21–¶23).

• On Delay in Writ Filing: Although there was delay in approaching the Court, the illegality of the cancellation order outweighed the delay (¶25).

• On Alternative Remedies: The petitioner is still eligible to furnish pending returns with applicable dues or file a reply to the SCN (¶28).

Judgment of the Court (¶24–¶29)

• The cancellation order dated 20.12.2023 is quashed for being non-speaking and unreasoned (¶24).

• Matter is remanded to the stage of SCN issuance. Petitioner is allowed 1 month to either:
  (a) file reply to SCN, or
  (b) furnish all pending returns and pay tax, interest, late fee, and penalty (¶28).

• Officer is directed to pass appropriate order in REG-19 or REG-20 within 1 month thereafter (¶28–¶29).

• Writ petition is allowed.

Between Fine Lines

• A GST registration cannot be cancelled without a detailed, reasoned speaking order.

• Even if the assessee does not reply, the department is duty-bound to record justification.

• Delay in filing the writ was condoned due to the glaring procedural illegality.

• Taxpayers must be given a fair chance to respond or rectify defaults.

• The judgment reinforces that procedural fairness is foundational in GST law enforcement.

Summary of Referred Cases

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