An unreasoned GST registration cancellation order passed without

An unreasoned GST registration cancellation order passed without a personal hearing cannot be legally sustained.

Issue

Whether the cancellation of an assessee’s GST registration via an unreasoned, non-speaking order passed without granting a personal hearing is legally valid under Section 29 of the CGST/MGST Act, 2017.

Facts

The assessee is a registered taxpayer under the GST regime.
The Revenue issued an order cancelling the assessee’s GST registration without recording any specific reasons or findings.
The assessee filed an application seeking revocation of the cancellation order, which was summarily rejected by the tax authorities.
The assessee’s subsequent statutory appeal against the rejection was also dismissed.
The assessee filed a writ petition in the High Court to challenge the validity of the cancellation order and the subsequent appellate rejection, claiming a total denial of a personal hearing and a breach of prescribed statutory procedures.

Decision

Held, in favour of the assessee (matter remanded): The unreasoned cancellation order and the appellate dismissal are quashed, and the matter is remanded for a fresh determination.
Mandatory Requirement of a Speaking Order: The legal requirement to pass a speaking, well-reasoned order in registration cancellation proceedings is firmly established and is no longer an open question of law (res integra).
Absence of Reasons is Fatal: Operating without a clear baseline of recorded reasons strips the administrative action of its legitimacy, rendering the entire cancellation unsustainable.
Restoration of Registration: The GST registration of the assessee stands restored immediately, subject to any fresh, legally compliant proceedings that the Revenue may choose to initiate.
Direction for Fresh Proceedings: The Revenue is directed to issue a fresh Show Cause Notice (SCN) if necessary, grant the assessee a proper personal hearing, and pass a detailed, reasoned order strictly in accordance with the law.

Key Takeaways

Reasoning is a Principle of Natural Justice: A non-speaking administrative order that fails to record clear reasons is inherently void, as providing reasons is a core component of the principles of natural justice.
The Right to a Personal Hearing is Absolute: Because the cancellation of a GST registration directly severely impacts a taxpayer’s right to carry on business, the tax authorities cannot bypass the mandatory requirement of granting a personal hearing.
Remand Over Absolute Immunity: When a tax order is struck down purely on the grounds of procedural violations or lack of reasoning, the courts will generally restore the taxpayer’s original status while preserving the Revenue’s right to re-adjudicate the matter following due process.

HIGH COURT OF BOMBAY

Muskan Trading Company

State of Maharashtra^*

G. S. KULKARNI and Aarti Sathe, JJ.

WRIT PETITION NO. 4996 OF 2025

APRIL 22, 2026

Anjesh Pandit and Ms. Shifa Khan for the Petitioner. Amar Mishra for the Respondent.

ORDER

1. Rule. Rule is made returnable forthwith. By consent of the parties, heard finally.

2. At the outset, Ms. Khan, learned Counsel appearing for the Petitioner, states that the challenge in the present Petition is confined to the impugned order dated 22^nd December 2022, whereby the Petitioner’s Goods and Services Tax (GST) registration has been cancelled.

3. We have accordingly heard learned Counsel for the parties. Insofar as the order of cancellation of GST registration is concerned, learned Counsel for the Petitioner submitted that the Petitioner was not granted an opportunity of being heard, and that the procedure prescribed by law has not been followed while passing the impugned order dated 22^nd December 2022. It was contended that, for the reasons set out in the Petition, a personal hearing ought to have been granted to the Petitioner, and in the absence thereof, the order of cancellation of GST registration could not have been passed. She further submitted that following the order of cancellation of GST registration, the Petitioner filed an application with Respondent No. 4 for revocation of cancellation, which was rejected by Respondent No. 4. Being aggrieved by the aforesaid rejection, the Petitioner filed an Appeal, which was rejected by Respondent No. 3 by order dated 3^rd September 2025. In support of her submissions, Ms. Khan has placed reliance on the decision of this Court in Makersbury India Pvt. Ltd. v. State of Maharashtra 100 GST 691 / 79 GSTL 341 (Bombay), to contend that it is incumbent upon the authorities to adhere to the prescribed procedure and to furnish cogent reasons while passing such orders.

4. Mr. Mishra, learned Counsel for the Respondents opposed the prayers as made in the present Petition and sought to place reliance on the affidavit-in-reply dated 23^rd February 2026 filed by Mr. Jayant Madhukar Dhaware, Joint Commissioner of State Tax (Nodal-1) in support of his submissions.

5. Inasmuch as the impugned order does not set out any reasons for cancelling the GST registration of the Petitioner, we find that the issue is no longer res integra. The requirement of recording reasons while passing such orders is now well settled. In this regard, the reliance placed by learned Counsel for the Petitioner on the decision in G.B. Traders v. Union of India [Writ Petition No. 8990 of 2025, dated 1-4-2026] is apposite. Learned Counsel for the Petitioner has also placed reliance on the following decisions:

i. Makersbury India Pvt. Ltd. (supra)

ii. Monit Trading Private Limited v. Union of India 99 GST 33/76 GSTL 34 (Bombay).

iii. CP. Pandey & Co. v. Commissioner of State Tax (Bombay)

iv. Ramji Enterprises v. Commissioner of State Tax 100 GST 81/78 GSTL 220 (Bombay)

v. Nirakar Ramchandra Pradhan v. Union of India (Bombay) /2023 (9) TMI 1176-Bombay High Court

vi. Afzal Hussain Saiyed v. Principal Commissioner of Central Tax 100 GST 820/79 GSTL 296 (Bombay)

6. Today, learned Counsel for the Petitioner, on instructions, has furnished the details of the Petitioner on which the show cause notice can be served by the Respondent department.

7. In the aforesaid circumstances, we are of the opinion that the present Petition can be conveniently disposed of in terms of the following order:-

ORDER

The impugned Order dated 22^nd December 2022 cancelling the GST registration of the Petitioner is quashed and set aside.

ii.

The proceedings are remanded to Designated Authority, with liberty to issue a fresh show cause notice within a period of two weeks from the date this order is made available to the Designated Authority by the Petitioner at the current residential address of the Petitioner being: H No. 435, Room No. 303, 3^rd Floor, B Wing, Building L, Vidhi Apartment, Krishna Complex, Gundawali Village, Mumbai -421302, and to pass a fresh order in accordance with law and also serve a copy of the show cause notice on the e-mail ID of the Petitioner, antarulshaikh850@gmail.com.

iii.

Post the issuance of the show cause notice, a personal hearing be granted to the Petitioner within a period of 2 weeks, and a reasoned order be passed. Designated Authority shall complete the determination within a period of three months from today.

iv.

Needless to observe that setting aside the impugned order should result in the GST registration of the Petitioner being restored. It is however clarified that this would not preclude the Revenue from issuing any fresh order to suspend the GST registration as may be permissible in law.

All contentions of the parties are expressly kept open.

vi. The Petition is disposed of in the aforesaid terms. No costs.