Failure To Reply To SCN Or Absence From Hearing Not Ground To Cancel GST Registration: Allahabad High Court

The Allahabad High Court on 17 March held that GST registration cannot be cancelled merely because a taxpayer fails to reply to a show cause notice or appear on the date fixed for hearing, and that authorities must record reasons before taking such a drastic step.

A Bench of Justice Saumitra Dayal Singh and Justice Vivek Saran set aside the cancellation of GST registration of Jubair Enterprises and granted the petitioner liberty to file a reply to the show cause notice.

The judges held:

“A bare perusal of the order reveals, absolutely no reason has been assigned to cancel the petitioner's registration. Not only reasons are required to be assigned before such a drastic step to be taken to cancel a registration practically takes away the right of the registered person to engage in trade. Here, by virtue Section 29 of the CGST Act, 2017 (hereinafter referred to as the 'Act'), such steps can be taken only for reasons specified under Section 129 of the Act.”

Jubair Enterprises had challenged an order dated 30 July 2025 passed by the Superintendent, Range XXV cancelling its GST registration. In the show cause notice issued to the petitioner, the reason stated for the proposed cancellation was that the firm was “bogus”.

Subsequently, the registration was cancelled on the ground that the petitioner had not filed any reply to the allegations contained in the show cause notice and had not appeared on the date fixed for hearing.

The Court observed that the impugned order did not assign any reason for cancelling the petitioner's registration. It further noted:

“To the extent the impugned order is bereft of reasons, it is no order in the eyes of law. Failure to respond to a show cause notice or failure to appear on a date fixed in a proceeding may offer a ground to proceed ex- parte against the noticee, however, it may never be the reason itself to cancel a registration.”

Accordingly, the Court set aside the cancellation order and granted the petitioner liberty to submit a reply to the show cause notice.

Counsel for Petitioner(s): Sumit Kumar Gupta, Vedika Nath, Yashonidhi Shukla

Counsel for Respondent(s): A.S.G.I., Dhananjay Awasthi, Priyanka Midha