Gauhati High Court Sets Aside Retrospective GST Registration Cancellation

Court Orders Fresh Opportunity for Petitioner to Present Case, Emphasizes Compliance with Natural Justice

In a significant ruling, the Gauhati High Court has set aside the cancellation of GST registration of Pritam Sovasaria, which had been executed with retrospective effect based on a cryptic show-cause notice. The judgment was delivered by Justice Sanjay Kumar Medhi on December 11, 2025, in response to a petition challenging the procedural fairness of the notice and the cancellation order.

The petitioner, Pritam Sovasaria, represented by Advocate Shri A. Goyal, contended that the show-cause notice issued on July 10, 2025, lacked specific details and did not provide adequate grounds for cancellation, thereby violating the principles of natural justice. The cancellation order, dated July 30, 2025, was challenged for being unreasonable and for infringing upon the fundamental rights guaranteed under Articles 14 and 21 of the Indian Constitution.

The Court observed that the show-cause notice merely cited the provisions of Section 29(2)(e) of the Central Goods and Services Tax Act, 2017, without furnishing specific details or enclosures, thereby depriving the petitioner of a reasonable opportunity to submit an effective reply. The judgment also cited a precedent from the Telangana High Court in the case of Rayees Metals v. Deputy State Tax Officer, reinforcing the need for detailed and transparent notices to ensure the protection of taxpayers' rights.

In defense, the respondents, represented by learned counsels including Ms. M. Das and Shri S. Chetia, argued that the petitioner had evaded receipt of the show-cause notice's enclosures and that the cancellation with retrospective effect was permissible under the law. However, the Court, emphasizing the importance of natural justice, decided to set aside the cancellation order and directed that the petitioner be given a fresh opportunity to present his case with a personal hearing.

The Court has ordered that a reply be filed by the petitioner within three weeks, after which the respondents must consider the reply in accordance with the law and communicate the outcome in writing. Additionally, the Court granted liberty to the petitioner to address the issue of seizure of goods with the appropriate authority.

This judgment underscores the judiciary's role in ensuring fair administrative procedures and the protection of constitutional rights.

Bottom Line:

GST Registration - Cancellation order based on cryptic show cause notice with retrospective effect - Order set aside - Fresh opportunity to file reply directed, ensuring compliance with principles of natural justice.

Statutory provision(s): Central Goods and Services Tax Act, 2017 Section 29(2)(e), Constitution of India, 1950 Articles 14 and 21

Pritam Sovasaria v. Union of India, (Gauhati) : Law Finder Doc Id # 2822478