CA Sansaar
Allahabad HC Criticises GST Authorities for Arbitrary Registration Cancellations
PrintThe Allahabad High Court has strongly criticised GST authorities for routinely cancelling traders’ GST registrations without giving valid reasons, observing that such actions amount to “economic death” as they cause severe hardship and disrupt legitimate business operations. In its judgment dated November 20, the court held that depriving a dealer of registration without proper justification or opportunity to be heard goes against both the purpose and spirit of GST law.
Allowing the writ petition filed by M/s Anil Art and Craft, a Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla quashed the cancellation order dated October 15, 2025, issued by the Assistant Commissioner, State Tax, Bhadohi Sector-1, which cancelled the firm’s GST registration retrospectively from October 8, 2025.
Earlier, a show-cause notice in Form GST REG-17 had been issued alleging wrongful availment and passing of fake input tax credit based on a DGGI survey and alleged transactions with non-existent suppliers. The court noted that merely stating a reply was “not satisfactory” reflects only the conclusion of the authority and not the reasoning, which fails to meet the minimum requirement of a reasoned administrative order.
Allowing the writ petition filed by M/s Anil Art and Craft, a Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla quashed the cancellation order dated October 15, 2025, issued by the Assistant Commissioner, State Tax, Bhadohi Sector-1, which cancelled the firm’s GST registration retrospectively from October 8, 2025.
Earlier, a show-cause notice in Form GST REG-17 had been issued alleging wrongful availment and passing of fake input tax credit based on a DGGI survey and alleged transactions with non-existent suppliers. The court noted that merely stating a reply was “not satisfactory” reflects only the conclusion of the authority and not the reasoning, which fails to meet the minimum requirement of a reasoned administrative order.
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