The Allahabad High Court has ruled that GST registration cannot be cancelled if none of the conditions under Section 29(2) of the Goods and Services Tax ( GST ) Act are violated or if specific findings justifying the cancellation are not recorded.
The judgment was delivered in response to a petition challenging the cancellation of the petitioner’s GST registration and the subsequent rejection of their revocation application.
The petitioner, Shree Shyamji Traders engaged in the iron and steel scrap business, had their GST registration cancelled following a survey conducted by the GST Department, which claimed no business activity or premises were found at the registered address.
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Despite filing a revocation application and subsequent appeals, the registration remained cancelled. The petitioner argued that the cancellation and rejection orders were issued without providing a proper opportunity for a hearing or recording specific reasons.
The Court found that the cancellation order failed to reference any violation of the five conditions stipulated under Section 29(2)(a) to (e) of the Act. Moreover, neither the revocation rejection nor the appellate orders provided reasons or findings to substantiate the action taken.
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Relying its earlier judgment in Apparent Marketing Pvt. Ltd. v. State of U.P., Justice Piyush Agawral stated that registration can only be cancelled if statutory conditions are violated and due process is followed.
The Court set aside the cancellation and revocation orders, directing the respondent authority to issue a fresh notice, if required, under Section 29(2) with specific grounds and in compliance with the law.
Additionally, the Court imposed a cost of ₹10,000 on the Proper Officer for procedural lapses, to be paid to the petitioner within one month.
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