Cancelling GST registration sans reason 'economic death' of biz entity: High Court
PRAYAGRAJ, Nov. 27 -- The Allahabad high court has held that cancellation of GST registration of traders by authorities without assigning any reason in the order amounts to "economic death" of a business entity.
The court underlined that depriving a dealer of this statutory lifeline, without assigning reasons or affording adequate opportunity, is "antithetical" to both letter and spirit of the GST law.
A division bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla allowed the writ petition filed by M/S Anil Art and Craft and set aside the order, dated October 15, 2025, passed by assistant commissioner, state tax, Bhadohi sector, cancelling petitioner's GST registration with retrospective effect from October 8, 2025.
The court observed that in the impugned order of the GST authorities, merely stating that a reply is "not satisfactory" reveals only the conclusion and not the reasoning which led to that, thereby failing the minimum standard of a reasoned administrative order.
In its judgement, dated November 20, the court also noted that cancellation orders passed in such a casual manner inflict disproportionate hardship on traders and disrupt legitimate business activity....
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