The Gauhati High Court has set aside a GST registration cancellation order on the ground that it was a non-speaking order passed without assigning reasons and held that the orders violate statutory requirements and principles of natural justice, even where the taxpayer fails to respond to notices.
The bench of Justice Manish Choudhury has observed that cancellation of GST registration would entail adverse civil consequences to the person affected as due to cancellation of her registration under the GST regime, the person would be outside it and it would be difficult for the person to carry on any business in a valid manner. It is not in doubt that the impugned Order dated 26.12.2024 whereby the petitioner’s GST registration has been cancelled is an order which has the consequence of bringing adverse consequences to the petitioner.
The case involved Yamang Siram, a proprietor of M/s Ngarsi Enterprise based in Arunachal Pradesh, whose GST registration was cancelled by an order dated December 26, 2024, following a show cause notice issued on August 12, 2024. The cancellation was primarily on account of alleged non-filing of returns under Section 39 of the CGST Act.
The petitioner contended that she was unable to respond to the show cause notice as it was only uploaded on the GST portal and not served manually, and due to login credential issues, she could not access it in time. By the time she became aware, the cancellation order had already been passed and the statutory timelines for revocation and appeal had expired.
The petitioner argued that the cancellation order was arbitrary and passed without application of mind, as it failed to record any reasons, thereby rendering it legally unsustainable. On the other hand, the department maintained that the petitioner had defaulted in filing returns for over six months and failed to avail statutory remedies within time.
The Court examined the provisions of Section 29 of the CGST Act and Rule 22 of the CGST Rules, which govern cancellation of registration. It noted that while authorities are empowered to cancel registration for non-filing of returns, such action must strictly follow the prescribed procedure, including issuance of notice and passing of a reasoned order in Form GST REG-19.
The Court observed that the impugned order merely stated that no reply was filed and used a vague ground of “Others” without specifying any reason for cancellation. This, the Court held, clearly demonstrated non-application of mind and failure to comply with statutory requirements.
Emphasizing the importance of reasoned orders, the Court held that a “speaking order” is a fundamental requirement, especially when adverse civil consequences such as cancellation of GST registration are involved. The absence of reasons renders the order arbitrary and illegal. The Court further clarified that even if a taxpayer fails to respond to a notice, the authority is still obligated to record reasons while taking such a drastic step.
The Court also underscored that cancellation of GST registration has serious implications, as it effectively disables a person from carrying on business lawfully. Therefore, adherence to due process and fair procedure is essential.
On the issue of delay in filing the writ petition, the Court held that the illegality of the order—being in violation of statutory mandate—outweighed the delay. It observed that when an order suffers from fundamental defects, such as absence of reasons, it cannot be sustained merely on the ground of delay.
The Court quashed the cancellation order and restored the matter to the stage of show cause notice. It granted the petitioner one month to either file a reply explaining why the registration should not be cancelled or to regularize compliance by filing pending returns and paying dues along with applicable interest and penalty.
Case Details
Case Title: Yamang Siram Versus UOI
Citation: JURISHOUR-1059-HC-2026(GAU)
Case No.: WP(C)/185/2026
Date: 29.04.2026
Counsel For Appellant: Kipa Yamak, Advocate
Counsel For Respondent: M. Kato. Deputy Solicitor General of India
