Facts of the Case

Chaitanya Contract Works, a proprietary concern holding GSTIN 37BCTPC4572P1ZS, was issued a show cause notice dated 24 June 2025 under the Andhra Pradesh GST Act, 2017, proposing cancellation of its GST registration. The petitioner submitted an elaborate reply by e-mail on 21 August 2025 denying the allegations in the notice. However, the department did not consider this reply and proceeded towards passing an order of cancellation without addressing the petitioner's objections, prompting the petitioner to approach the High Court seeking a direction that its reply be duly considered before any cancellation order is passed.

Issues Involved

  1. Whether a GST registration cancellation proceeding can validly proceed to an order without the proper officer considering the taxpayer's reply to the show cause notice.
  2. What relief is appropriate where the grievance is not about the merits of cancellation but about a complete failure to engage with the taxpayer's response.

Petitioner's Arguments

  • An elaborate reply denying the allegations had been duly filed on 21 August 2025 but was not being considered by the department before proceeding to cancel the registration.
  • The show cause notice itself was also assailed as invalid for absence of a proper DIN/FRN and defective signature, and as violative of principles of natural justice.
  • Proceeding to cancel the registration without considering the objections filed would be illegal, arbitrary and without jurisdiction.

Respondent's Arguments

  • No specific counter to the factual assertion regarding non-consideration of the reply was placed on record by the department's counsel.

Court Order / Findings

  • The Court did not delve into the merits of the cancellation allegations or the validity of the show cause notice, disposing of the matter on the narrow footing that the objections filed by the petitioner had not been considered.
  • It directed the Assistant Commissioner to consider the objections dated 21.08.2025 and pass a reasoned order after giving the petitioner an opportunity of hearing, rather than proceeding straight to cancellation.
  • The writ petition was disposed of on this limited direction, with no order as to costs and pending applications closed.

Important Clarification

  • Before cancelling a taxpayer's GST registration pursuant to a show cause notice, the proper officer must actually consider the taxpayer's reply and pass a reasoned, speaking order after affording a hearing — a bare cancellation without engaging with the reply is impermissible.
  • Courts will readily intervene at the threshold stage, before an actual cancellation order is passed, to enforce this basic procedural safeguard rather than wait for the cancellation to be finalised.

Sections Involved

  • Andhra Pradesh Goods and Service Tax Act, 2017 – governing statute for the registration and its proposed cancellation.
  • Principles of natural justice (audi alteram partem) – require that a reply to a show cause notice be duly considered, and reasons recorded, before an adverse order is passed.

Decision – In Favour of

The decision is in favour of the assessee (petitioner), securing a direction that its reply must be considered and a reasoned order passed after hearing, before any cancellation takes effect.

Case Details

Court: High Court of Andhra Pradesh at Amaravati. Case No.: W.P. No. 27239 of 2025. Coram: Hon'ble Sri Justice R Raghunandan Rao and Hon'ble Sri Justice T.C.D. Sekhar. Date of Order: 8 October 2025.

Link to Download the Order

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