Dhruba Jyoti Saikia Vs Union of India And 3 Ors. (Gauhati High Court)
In Dhruba Jyoti Saikia vs. Union of India & Ors., the Gauhati High Court set aside an order canceling the petitioner’s GST registration, citing a lack of reasoning and due process. The petitioner, facing financial hardship, had failed to file GST returns, leading to a show cause notice on January 15, 2023, which also suspended the registration. Subsequently, on February 28, 2023, Respondent No. 4 issued an order canceling the registration but provided no detailed reasons beyond stating “Registration is cancelled.” The petitioner claimed to have filed returns later but was not granted relief administratively, prompting the writ petition.
The High Court observed that cancellation of GST registration is a quasi-judicial decision with serious civil consequences, as it directly affects a business’s ability to operate. It emphasized that any such order must be reasoned, in line with principles of natural justice. The absence of justification in the cancellation order indicated non-application of mind by the tax authorities. The court ruled that the impugned order lacked procedural fairness and set it aside, reinstating the petitioner’s registration to its status before the issuance of the show cause notice.
Judicial precedents emphasize the necessity of proper reasoning in administrative decisions affecting legal rights. The Supreme Court in Kranti Associates Pvt. Ltd. vs. Masood Ahmed Khan (2010) held that orders by authorities exercising quasi-judicial powers must be well-reasoned to ensure transparency and fairness. Similarly, the Gauhati High Court’s ruling aligns with the principle that tax authorities must provide clear justifications when canceling registrations under the GST framework.
