Delhi High Court Declares GST Cancellation Invalid Without Personal Hearing

The Delhi High Court has ruled that canceling GST registration without a personal hearing violates the principles of natural justice. This decision reinforces the importance of fair hearing procedures in GST compliance.

Key Takeaways:

Right to Personal Hearing: The court highlighted that failing to provide adequate hearing opportunities renders proceedings “defective.” The Ministry of Finance circular mandates at least three personal hearing opportunities.

Lack of Reasons for Cancellation: The cancellation order was found to be “bereft of any reason,” with no clear justification for the retrospective action.

Separate Proceedings for Penalty: The court clarified that the penalty demand of ₹24,38,232/- is independent of the GST registration status, and cannot be a basis for refusal of revocation.

Future Actions: Authorities can still pursue recovery actions, but fair hearing procedures must be followed.

This ruling, by Justice Ravinder Dudeja and Justice Yashwant Varma, underscores the need for transparency and adherence to natural justice principles in GST proceedings.

🔍 #GSTNews #TaxUpdates #LegalNews #FinanceLaw #IndiaTax #BusinessCompliance