Rejection of fresh GST registration quashed as unreasoned order failed to examine applicability of Section 29(2) and CBIC circular requirements

Case Reference

M/s Maharaj Ji Enterprises v. Union of India & Ors.
Patna High Court
Civil Writ Jurisdiction Case No. 15175 of 2024
Judgment dated: 16 July 2025
Category of dispute: GST Registration cancellation and fresh registration
Relevant Provisions: Section 29(2) of the CGST Act, Rule 9 of CGST Rules, CBIC Circular No. 95/14/2019-GST dated 28.03.2019

Facts of the Case (Paras 3–4)

The petitioner, M/s Maharaj Ji Enterprises, was earlier registered under GST in Madhubani Circle. Due to business downturn, the petitioner failed to file GST returns for over six months, leading to cancellation of registration on 22.02.2023 under Section 29(2)(c). The petitioner accepted cancellation but later applied for fresh registration after clearing dues up to February 2023, as allowed by the GST portal. However, the Deputy Commissioner (Respondent No. 7) issued a notice on 06.08.2024 demanding filing of returns for the period after February 2023, though the portal did not permit such filings. Subsequently, the fresh registration application was rejected by a one-line order dated 17.08.2024 without reasons.

Questions before the Court

1. Whether a fresh application for GST registration is barred when earlier registration was cancelled under Section 29(2)(c) of the CGST Act?

2. Whether the rejection order (Annexure P/6) without reasoning or statutory findings can be sustained in law?

3. Whether CBIC Circular No. 95/14/2019-GST permits rejection of fresh registration automatically or requires due examination of facts?

Observations of the Court (Paras 10–13)

• The Court noted that remedies of revocation or appeal were available to the petitioner against earlier cancellation, but non-availment does not automatically bar a fresh registration.

• CBIC Circular No. 95/14/2019-GST clarifies that fresh registration may not be barred; however, the Proper Officer must record findings on whether conditions of Section 29(2)(b)/(c) continue and whether revocation has been sought.

• Section 29(2) of the CGST Act empowers cancellation for continuous default of six months in filing returns.

• The rejection order (Annexure P/6) was completely unreasoned and failed to refer to Section 29(2) or the circular. The grounds disclosed later in the counter-affidavit were not even mentioned in the notice or rejection order.

• Therefore, the order was arbitrary and liable to be quashed.

Judgment (Paras 14–15)

The High Court quashed the rejection order (Annexure P/6) as unreasoned and remitted the matter back to the Deputy Commissioner (Respondent No. 7) to reconsider the application. The officer must provide the petitioner an opportunity to comply with statutory requirements and pass a fresh order in accordance with law. The writ was allowed to this extent.

Table of Case Laws Referred

(No other external judgments were cited in this case.)

Between Fine Lines

This judgment clarifies that cancellation of GST registration for non-filing of returns does not automatically bar a fresh registration. Authorities must record proper reasons and examine statutory conditions before rejecting applications. For businesses, this ensures that technical lapses or portal limitations cannot be used to deny fresh registration arbitrarily. However, taxpayers must proactively seek revocation or comply with amnesty schemes to avoid prolonged disputes.

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