The Allahabad High Court has overturned a decision to cancel a company’s GST registration. The high court found that the authorities did not properly inform the company about the reasons for the cancellation and also ignored its explanation for filing an appeal late.
The bench of Justice Vikas Budhwar has discovered procedural lapses in the actions of the tax authorities. It said that the cancellation order was non-speaking and ex parte, and does not include proper reasoning.
No material was there on record that shows the mode, manner, or date of service of the show cause notice (SCN). Only claiming service through email or mobile without evidence does not fulfil the norms of law.
The applicant, a registered dealer engaged in the execution of works contracts, had its GST registration cancelled by the Assistant Commissioner, State Tax, Lalitpur, through an order dated July 6, 2024. As per the allegations of failure to file returns u/s 29(2)(b) of the GST Act, the cancellation arises.
The department mentioned that an SCN on February 24, 2024, had been issued and served via electronic means. However, the applicant stated that the notice was never received in the manner stipulated u/s 169 of the GST Act.
Therefore, the cancellation order was passed ex parte without any answer from the applicant.
An appeal was submitted by the applicant to the Additional Commissioner (Appeals), albeit with a delay of over 300 days. The applicant was clueless about the cancellation order as its GST compliance was being managed by an accountant who failed to notify it of the notice and order.
On September 18, 2025, the appellate authority denied the appeal only based on limitation, keeping that the delay surpassed the condonable duration mentioned u/s 107 of the GST Act.
Two legal issues have been analysed by HC- Whether the SCN was served within the law, and whether the appellate authority made a mistake in not considering the grounds for condonation of delay.
The court outlined that effective service of notice is a condition precedent for passing adverse orders and needs to be demonstrated perfectly.
The court, concerning the issue of delay, said that the applicant has raised detailed grounds in the appeal explaining the delay, along with cluelessness due to the conduct of its accountant. But the appellate authority could not analyse these grounds.
The court stated that once mentioned grounds for the condonation of delay are raised, the appellate authority is bound to recognise them, whatever be the outcome.
Read Also: Calcutta HC Upholds GSTIN Cancellation Over Non-Response to GST Notice and Lack of Business Presence
The court, setting aside both the original cancellation order and the appellate order, remitted the case back to the adjudicating authority with the directions that the applicant will submit a response before SCN by April 3, 2026, and the adjudicating authority will grant a hearing and pass a reasoned order within 3 months.
The court considered that the applicant was aware of the SCN since it was annexed to the writ petition.
| Case Title | M/S New Bharat Electricals vs. State Of U.P. |
| Case No. | WRIT TAX No. – 8009 of 2025 |
| For Petitioner | Pooja Talwar |
| For Respondent | C.S.C. |
| Allahabad High Court | Read Order |
