The Apex Court did not interfere with the judgment of the Allahabad High Court, which stated that cancellation of the GST registration without furnishing proper reasons is not lawfully sustainable.
The court permitted the taxpayer to pursue the regulatory appeal and extended the limitation period for filing the appeal.
The case arose after GST authorities cancelled a taxpayer’s registration by only citing that the response to the show-cause notice was unsatisfactory. The Allahabad High Court said that this non-speaking order breaches the principles of natural justice, as GST registration cancellation has serious business outcomes.
The Court said that a cancelled GST registration averts a business from issuing tax invoices, claiming Input Tax Credit (ITC), and participating in the GST supply chain. Thus, quashing a registration without proper reasons can cause the economic death of a business entity.
Similar: Allahabad HC: Repeated Cancellation of GST Registration Without Reason Amounts to Financial Death
The Court asked the Commercial Tax Commissioner, Uttar Pradesh, to issue guidelines confirming that GST officers pass reasoned orders, furnish a proper chance for hearing, and avoid arbitrary cancellation of registrations. It restored the GST registration of a taxpayer and permitted fresh proceedings as per law.
The Apex Court kept the opinion of the HC and set aside the challenge against the judgment.
| Case Title | MS Anil Art and Craft vs State of Uttar Pradesh |
| Case No. | 17892-17893/2026 |
| For Petitioner | Mr. P.B. Suresh, Sr. Adv. Ms. Parul Shukla, AOR Mr. Udayaditya Banerjee, Adv. Mr. Gladson Rodrigues, Adv. Ms. Shubhangi Pandey, Adv. Ms. Ramya M.B., Adv. |
| Supreme Court | Read Order |