Mandatory 30-day Notice in FORM GST REG-31 Required Before Cancelling GST Registration for Bank Account Default: Gauhati High Court
The Gauhati High Court, in Huma Power & Tower Pvt. Ltd. v. State of Assam , set aside the Show Cause Notice and the consequential order cancelling GST registration issued for alleged contravention of Rule 10A of the CGST Rules relating to bank account validation. The Court held that Rule 21A(2A)(b) specifically mandates issuance of a notice in FORM GST REG-31, granting the taxpayer thirty days to explain why registration should not be cancelled. In the present case, the Proper Officer incorrectly invoked FORM GST REG-17, which provided only seven days to respond, and proceeded to cancel the registration before expiry of the statutorily prescribed period. The Court observed that when a statute prescribes a particular procedure, authorities must strictly adhere to it. The use of an incorrect form and curtailment of the reply period violated both the CGST Rules and the principles of natural justice. Consequently, the impugned notice and cancellation order were quashed, and the petitioner’s GST registration was directed to be restored, without affecting its underlying tax liabilities and statutory obligations.
Facts:
Huma Power & Tower Pvt. Ltd. (“the Petitioner”) is a private limited company which obtained GST Registration vide Registration Certificate No. 18AACCH1766M2Z7 in FORM GST REG-06 on September 20, 2017, with July 1, 2017 as the date of liability.
On May 19, 2025, the Assistant Commissioner of State Tax, Guwahati (“the Proper Officer”) issued a Show Cause Notice (“the SCN”) in FORM GST REG-17 proposing to cancel the GST Registration of the Petitioner on the ground of violation of Rule 10A read with Rule 21(d) of the CGST Rules. The remarks recorded in the SCN stated that the bank account validation showed “Account Frozen or Blocked” and called upon the Petitioner to reverify the account details.
The SCN granted only seven days to file a reply, and the date and place for personal hearing were stated as “undefined at undefined”. The SCN was uploaded only on the common portal under Section 146 of the CGST Act, 2017, without any individual communication, and consequently escaped the notice of the Petitioner.
The Petitioner subsequently approached the Proper Officer seeking additional time to regularize its bank account, as the account was maintained at a branch located in Lucknow, Uttar Pradesh; however, the verbal request for time was denied.
Thereafter, on June 9, 2025, the Proper Officer passed the Order of Cancellation of Registration (“the Impugned Order”) with effect from June 9, 2025, recording that the Petitioner had failed to file any reply to the SCN.
Subsequent attempts by the Petitioner to update bank account details in FORM REG-14 and to file an application for revocation of cancellation could not be processed on the common portal, the latter being rejected on the ground that the limitation period had expired. Aggrieved, the Petitioner approached the Hon’ble Gauhati High Court invoking the writ jurisdiction under Article 226 of the Constitution of India.
Issue:
Whether a Show Cause Notice issued in FORM GST REG-17 affording only seven days to reply is valid for cancellation of GST Registration on the ground of contravention of Rule 10A of the CGST Rules, when Rule 21A(2A)(b) specifically mandates issuance of notice in FORM GST REG-31 with a period of thirty days to show cause?
Held:
The Hon’ble Gauhati High Court in Writ Petition (C) No. 2147 of 2026 held as under:
- Observed that Rule 10A of the CGST Rules, inserted vide Notification No. 31/2019 – Central Tax dated June 28, 2019, mandates every registered person (except those registered under Rules 12 or 16) to furnish bank account details on the common portal within thirty days from the grant of registration, or before furnishing the first FORM GSTR-1 / using the invoice furnishing facility, whichever is earlier.
- Noted that Rule 21A(2A)(b) of the CGST Rules, as substituted vide Notification No. 38/2023 – Central Tax dated August 4, 2023, prescribes that where there is contravention of Rule 10A by the registered person, the registration shall be suspended and the registered person shall be intimated in FORM GST REG-31 – electronically, on the common portal, or by communication to the registered e-mail address – affording a period of thirty days to explain as to why the registration shall not be cancelled.
- Noted that Rule 22(1) of the CGST Rules, in contrast, provides a general procedure for cancellation through FORM GST REG-17 affording only seven working days to show cause, and is applicable only where Rule 21A(2A)(b) is not attracted.
- Observed that when a specific procedure has been prescribed under the statute for cancellation of registration for contravention of Rule 10A, resort cannot be taken to some other general provision; the maxim “where the statute requires a thing to be done in a particular manner, it must be done in that manner alone” squarely applies.
- Held that the SCN dated May 19, 2025 was wrongly issued in FORM GST REG-17 (with seven days) instead of FORM GST REG-31 (with thirty days), thereby violating the statutory prescription contained in Rule 21A(2A)(b) of the CGST Rules.
- Held that by affording only seven days instead of the statutorily mandated thirty days, and by passing the Impugned Order on June 9, 2025 (i.e., before the expiry of thirty days from the date of the SCN), the Proper Officer also violated the principles of natural justice by depriving the Petitioner of an effective and reasonable opportunity of being heard.
- Directed that the Show Cause Notice dated May 19, 2025 and the Impugned Order of Cancellation dated June 9, 2025 are set aside and quashed; and the respondent authorities shall restore the GST Registration of the Petitioner originally granted on September 20, 2017.
- Clarified that the order shall not affect the liability of the Petitioner to pay tax and other dues, or to discharge any other obligation under the CGST Act or the CGST Rules, for any period.
Our Comments:
Section 29(2) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) empowers the Proper Officer to cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where the registered person has contravened the provisions of the Act or the rules “as may be prescribed”. The expression “prescribed”, read with Section 2(87), refers to the procedure prescribed under the CGST Rules made on the recommendation of the GST Council.
Rule 10A of the CGST Rules requires every registered person to furnish bank account details on the common portal within thirty days from the grant of registration, or before filing the first FORM GSTR-1, whichever is earlier. Contravention of this requirement is one of the grounds enumerated under Rule 21(d) for which registration can be cancelled.
Significantly, the legislature carved out a separate and graded mechanism for dealing with Rule 10A defaults by substituting Rule 21A(2A)(b) vide Notification No. 38/2023 – Central Tax dated August 4, 2023. The legislative rationale appears to be that bank account discrepancies are often administrative or technical in nature (such as freezing/blocking of accounts, change of branch, or banking verification issues) which require a reasonable time to rectify, unlike defaults such as non-filing of returns or fraudulent activity which are dealt with under Rule 22(1) read with FORM GST REG-17. The legislature consciously prescribed FORM GST REG-31 with a thirty-day window for Rule 10A defaults, which cannot be substituted by the seven-day window of FORM GST REG-17.
The principle that “where a statute requires a thing to be done in a particular manner, it must be done in that manner alone, and all other modes are forbidden” is a settled rule of statutory construction originating from Taylor v. Taylor (1875) 1 Ch.D. 426 and reaffirmed by the Privy Council in Nazir Ahmad v. King Emperor AIR 1936 PC 253. The Hon’ble Supreme Court has applied this doctrine consistently, including in Chandra Kishore Jha v. Mahavir Prasad (1999) 8 SCC 266 and Babu Verghese v. Bar Council of Kerala (1999) 3 SCC 422.
In pari materia, the Hon’ble Delhi High Court and the Hon’ble Gujarat High Court have repeatedly held that orders of cancellation of GST Registration passed in violation of the principles of natural justice – particularly where vague or non-speaking Show Cause Notices are issued, or where the taxpayer is not afforded a meaningful opportunity of hearing – are liable to be set aside. Notable rulings include the Hon’ble Delhi High Court in Aarcity Builders Pvt. Ltd. v. Union of India and the Hon’ble Gujarat High Court in Aggarwal Dyeing and Printing Works v. State of Gujarat, both of which emphasised that GST Registration cancellation has serious civil consequences and must be preceded by a clear, specific and adequate Show Cause Notice.
Similarly, the Hon’ble Allahabad High Court in Surendra Bahadur Singh v. State of U.P. [WRIT TAX No. – 172 of 2023] and several other High Courts (including Calcutta, Madras and Bombay) have set aside cancellation orders where the Proper Officer mechanically issued cryptic SCNs without indicating the precise contravention or the documents being relied upon, and have remanded the matters for fresh adjudication after providing reasonable opportunity.
The present ruling is a welcome clarification which reinforces three important propositions: (i) the form of the Show Cause Notice is not a mere formality but a substantive procedural safeguard; (ii) the period of reply prescribed by the rules cannot be curtailed by the Proper Officer for administrative convenience; and (iii) where two procedures co-exist in the same set of rules, the specific procedure overrides the general one.
Taxpayers presently facing or anticipating cancellation proceedings on the ground of Rule 10A non-compliance would be well advised to (i) carefully examine the form in which the Show Cause Notice has been issued, (ii) verify whether the statutorily prescribed thirty-day window has been afforded, and (iii) raise the jurisdictional objection at the earliest stage. Equally, field officers should ensure that the correct FORM GST REG-31 is generated through the portal in such cases to avoid avoidable litigation and revenue leakage on procedural grounds.
It may also be noted that the present judgment carefully preserves the substantive tax liability of the taxpayer for any period by expressly clarifying that the restoration of registration does not absolve the Petitioner from discharging tax, interest, penalty or any other obligation under the CGST Act or the CGST Rules.
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