Facts of the Case

The petitioner, M/s Imagine Marketing Limited, challenged the Order for Cancellation of Registration dated 26th November, 2024 passed by the Superintendent, Range-56, the subsequent order dated 8th January, 2025 rejecting revocation of cancellation, and the Order-in-Appeal dated 30th April, 2025 affirming the said rejection. The petitioner is a reputed company and the parent entity of the well-known audio and wearable brand “boAt”, operating from premises at Village Hauz Khas, New Delhi, under valid lease arrangements.

A show cause notice dated 15th October, 2024 was issued proposing cancellation of GST registration on vague grounds such as “Others” and “Non-Existent”, without furnishing any reasons. The petitioner filed a detailed reply on 28th October, 2024 along with lease deeds and recent GST returns. Despite the same, the registration was cancelled with effect from 15th October, 2024 by a cryptic order stating merely that the reply was “not considerable”.

The petitioner thereafter applied for revocation of cancellation. A further show cause notice dated 26th December, 2024 was issued seeking various documents. A detailed reply along with documents was filed on 6th January, 2025. The revocation application was nonetheless rejected on 8th January, 2025. The appeal filed before the Appellate Authority was also dismissed on 30th April, 2025 on the ground that requisite documents had not been furnished.

Issues Involved

Whether cancellation of GST registration could be sustained when the show cause notice and orders lacked reasons, whether rejection of revocation and dismissal of appeal without considering documents amounted to violation of principles of natural justice, and whether mechanical and templated orders passed without application of mind were sustainable in law.

Petitioner’s Arguments

The petitioner contended that all requisite documents, including lease deeds, GST returns and replies, had been filed both before the adjudicating authority and the appellate authority. It was argued that the show cause notice was vague, the cancellation order and subsequent orders were non-speaking, and the authorities had failed to consider material on record. The petitioner submitted that repeated demands for documents already available on the GST portal were arbitrary and unjustified.

Respondent’s Arguments

The Revenue relied upon the orders passed by the adjudicating authority and the appellate authority, contending that the petitioner had failed to submit the documents as sought and that the cancellation and rejection of revocation were justified.

Court Order / Findings

The Delhi High Court found that the approach of the adjudicating authority was cavalier and that the cancellation, revocation rejection and appellate orders were mechanical, templated and computer-generated, lacking any reasoning or application of mind. The Court observed that the replies and documents filed by the petitioner were completely ignored and that the authorities failed to show even basic fairness in adjudication, particularly in the case of a regular taxpayer.

The Court held that repeatedly calling for documents already available on the GST portal was unjustified and that the impugned orders were perverse and unsustainable in law. The appellate authority’s order was also held to be erroneous as the record demonstrated that documents had indeed been filed.

Important Clarification

The High Court clarified that cancellation of GST registration has serious civil consequences and authorities are duty-bound to pass reasoned orders after considering replies and documents placed on record. Mechanical disposal of proceedings violates principles of natural justice and cannot be sustained.

Final Outcome

The writ petition was allowed. The Order-in-Appeal dated 30th April, 2025, the cancellation order dated 26th November, 2024, and the order dated 8th January, 2025 rejecting revocation were all set aside. The GST registration of the petitioner was restored. The show cause notice dated 15th October, 2024 was directed to be adjudicated afresh after granting personal hearing and considering the replies already filed. Costs of ₹25,000 were imposed on the Department, recoverable personally from the concerned Superintendent.

SOURCE LINK: https://delhihighcourt.nic.in/app/showFileJudgment/75421112025CW176992025_165612.pdf  

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