Without a valid justification, a cancellation order for the GST registration is unjustifiable. In this case, the court held that an order cancelling a GST registration without specifying the reason for cancellation is not sustainable.

The Delhi High Court in Singla Exports vs Central Board of Indirect Taxes and Customs [W.P.(C) 2732 of 2023; 09-Aug-2023] quashed the GST registration cancellation order by holding that the auto generated order which does not specify reason for cancellation cannot be sustained.

The petitioner, Singla Exports, was a registered GST taxpayer. In June 2023, the GST authorities issued a show cause notice to the petitioner alleging that it had failed to file its GST returns for the period from January to March 2023.

The petitioner responded to the show cause notice, but the GST authorities did not accept its response. Instead, they issued an order cancelling the petitioner's GST registration.

In my view: The GST authorities are required to give the taxpayer an opportunity to explain the reasons for non-filing of the returns before cancelling the registration.

The order cancelling the GST registration must specify the reason for cancellation. An auto-generated order cancelling the GST registration is not sustainable.