• Dated 11^th April, 2025

Improper GST Registration Cancellations Set Aside Due to Vague Notices and Procedural Lapses: Gauhati High Court

A group of taxpayers in Assam filed petitions challenging the cancellation of their GST registrations by tax authorities. These cancellations were mostly due to non-filing of tax returns for several months. However, the affected taxpayers argued that they were never given proper notice about the cancellation, or the notices were vague and just uploaded on the GST portal without personal intimation. Some even pointed out inconsistencies in the orders - where officials mentioned both that a reply was received and that no reply was submitted, in the same document.

The Hon'ble High Court observed that under GST law, before cancelling a taxpayer's registration, the tax department must clearly mention the reasons and provide a real opportunity to respond, including mentioning what exact periods returns were not filed. It found that the show cause notices and cancellation orders in these cases were either vague or issued in a mechanical way without proper application of mind. As a result, the Hon'ble court ruled that these notices and cancellations were invalid because they did not follow due process.

Additionally, the Hon'ble court noted that even though the taxpayers had not filed appeals or revocation applications on time, they eventually filed all pending returns and paid taxes, penalties, and late fees. Since GST rules now require that once registration is revoked, all returns from the cancellation date to the revocation must be filed within 30 days, the Hon'ble court allowed these taxpayers to do so. It extended the deadline for filing annual returns to ensure fairness, given the delays and complications caused by the improper cancellation.

Final Verdict

The Hon'ble court set aside all the cancellation orders and instructed each petitioner to file their pending returns within 30 days from the judgment date. They were also directed to pay all tax dues, penalties, and fees. The ruling emphasized that tax authorities must follow due procedure and ensure taxpayers' rights are protected.

Author: Harsh Kr Gupta

Edited by: Shaily Gupta