High Court Criticizes GST Authorities Over Unjust Cancellations

The Allahabad High Court has criticized GST authorities for frequently canceling traders' GST registrations without justification, labeling this as an 'economic death.' The court emphasized the need for reasonable administrative procedures and penal consequences for non-compliance. It set aside an order against Anil Art and Craft, urging reform in GST registration processes.

The Allahabad High Court has issued a stern rebuke to GST officials over their repeated issuance of arbitrary cancellation orders for traders' GST registrations. The court emphasized that such actions severely impact business entities, effectively announcing their 'economic death' by disrupting legitimate business activities without providing sufficient reasoning.

In a significant move, the court allowed a writ petition filed by Anil Art and Craft, overturning an order from the assistant commissioner of state tax in Bhadohi that had retrospectively canceled the petitioner's GST registration. The court mandated that the judgment be relayed to the commercial tax commissioner, who must issue precise administrative guidelines within 15 days to GST officers handling registration cancellations.

The bench of Justices Saumitra Dayal Singh and Indrajeet Shukla stressed that these guidelines should impose penalties on officers who issue non-speaking orders or fail to offer traders a fair opportunity to address accusations. The court also underscored the need for strict adherence to procedural safeguards under the GST regime to prevent future occurrences.

(With inputs from agencies.)