Guahati HC: Sri Mohan Mech V. Union of India : 2025 (3) TMI 1335
Background:
The petitioner M/s Sri Mohan Mech, had obtained GST registration under the Central Goods and Services Tax (CGST) Act, 2017. The Petitioner received a Show Cause Notice asking why his GST registration should not be cancelled due to the failure to furnish returns for a continuous period of six months, as per Section 39 of the CGST Act. The notice directed the petitioner to furnish a reply within thirty days and appear before the Proper Officer on February 11, 2023. It also mentioned that failure to submit a reply or appear for the hearing would result in an ex-parte decision based on available records. Simultaneously, the petitioner’s GST registration was suspended from January 15, 2023. Subsequently, on February 24, 2023, an order was passed cancelling the petitioner’s GST registration with effect from the same date without mentioning any reasons.
Decision:
The Court found that the impugned cancellation order was not in conformity with the REG-19, as it did not provide any reasons for the cancellation. The Court emphasized the necessity of a speaking order, which explicitly states the reasons for the decision, to ensure proper application of mind and to provide a check against arbitrary actions by the authorities. The Court held that the absence of reasons in the cancellation order amounted to a violation of the prescribed procedure and principles of natural justice, rendering the order illegal. Consequently, the cancellation order was quashed, and the matter was remanded back.
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