Registration Cancellation Quashed for Violation of Natural Justice

Case Title: M/S Genius Ortho Industries v. Union of India & Others
Court: High Court of Judicature at Allahabad
Petition No.: Writ Tax No. 542 of 2023
Neutral Citation: 2025:AHC:62619
Date of Judgment: 24.04.2025
Category of Dispute: GST Registration Cancellation
Relevant Sections/Rules: Section 29, Section 30 of CGST Act, 2017; Rule 25 & Rule 22 of CGST Rules, 2017

Facts of the Case (Para 2–5, 11–13)

• The petitioner, a registered dealer engaged in surgical goods, had its premises surveyed by GST officials. Discrepancies were allegedly found during physical verification.

• A show cause notice dated 13.12.2022 was issued, followed by cancellation of GST registration on 19.12.2022, citing absence of stock, workers, or activity. (Para 11)

• The petitioner argued that no material or verification report used against it was ever supplied. It further contended that the order violated principles of natural justice. (Para 5, 13)

• The Appellate Authority also dismissed the appeal on 27.02.2023.

Questions in Consideration (Para 5, 9, 13)

1. Whether cancellation of registration without supplying the material relied upon and without proper notice is valid?

2. Whether the authorities acted contrary to Rule 25 and Form GST REG-30 by not disclosing survey material in the SCN?

3. Whether the registration could be cancelled in absence of fraud, misstatement, or suppression?

Observations of the Court (Para 11–13)

• The SCN was vague, containing only a one-sentence allegation of “discrepancies” without details. (Para 11)

• The cancellation order ignored evidence that the premises were occasionally operational, as admitted by the watchman. (Para 12)

• Authorities relied on material available in Form GST REG-30 but failed to disclose the same in the notice, violating natural justice. (Para 13)

• Therefore, the cancellation order and appellate order could not be sustained.

Judgment of the Court (Para 14–17)

• Both the cancellation and appellate orders were quashed. (Para 14)

• The matter was remanded to the proper authority for fresh decision with a reasoned order, after giving due opportunity of hearing and allowing the petitioner to produce evidence. (Para 16)

• Any deposit made by the petitioner pursuant to the cancelled order will be subject to the outcome of the fresh proceedings. (Para 17)

Between Fine Lines

• A vague SCN without detailed grounds is invalid.

• Authorities must supply all material relied upon before cancellation.

• Physical verification reports under Rule 25/REG-30 must be disclosed to the taxpayer.

• Cancellation without fraud/misstatement requires stronger justification.

• The High Court emphasized the principle of natural justice in GST registration matters.

Summary of Referred Cases

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