Court directs authorities to grant hearing and reconsider revocation application on merits, disregarding limitation plea in M/S Super Enterprises case
In a significant judgment delivered on August 28, 2026, the Patna High Court (Division Bench comprising Mr. Rajeev Ranjan Prasad and Ramesh Chand Malviya, JJ.) quashed the cancellation of GST registration of M/S Super Enterprises, underscoring the mandatory requirement of natural justice under Section 75(4) of the Bihar Goods and Services Tax Act, 2017 (BGST Act). The court ruled that cancellation of GST registration without providing a proper opportunity of hearing and without considering the merits of the case is unsustainable in law.
The petitioner, M/S Super Enterprises, had their GST registration cancelled via an ex-parte order dated April 22, 2024, issued by the Superintendent, CGST & Central Excise, Muzaffarpur. The cancellation was triggered by the petitioner’s failure to file GST returns for six months due to illness and incapacitation, which impeded their ability to manage business affairs effectively. Despite filing the pending returns and paying due taxes, penalties, and late fees subsequently, the petitioner’s appeal against the cancellation was dismissed by the Additional Commissioner (Appeals), Muzaffarpur, on the sole ground of limitation, without adjudicating on the merits.
The Court observed that under Section 75(4) of the BGST Act, an opportunity of hearing must be granted if an adverse decision is contemplated. However, in this case, the hearing date was fixed even before the expiry of the period allowed for submitting a show cause reply, rendering the hearing date an empty formality and a violation of natural justice principles. The petitioner was effectively denied a fair chance to contest the cancellation.
Drawing upon its earlier judgment in M/s Galaxy Heights v. Union of India (2025), the Court highlighted that permanent cancellation of GST registration can cause ‘civil death’ to the taxpayer’s livelihood by effectively barring them from conducting business. Emphasizing the severe impact, the Court granted liberty to the petitioner to file an application for revocation of the cancellation within three weeks from the judgment date. The competent authority was directed to consider the application on merits and not reject it merely on the ground of limitation. The authority was further mandated to decide the revocation application within two months from the date of filing.
This judgment reinforces the procedural safeguards enshrined in tax laws that prevent arbitrary or unjust cancellation of registrations, thereby protecting taxpayers’ rights and livelihoods. It also clarifies that statutory timelines cannot override the fundamental requirement of fair hearing where adverse consequences are envisaged.
Bottom Line:
Cancellation of GST registration without proper hearing and consideration of merits violates principles of natural justice.
Statutory provision(s):
Bihar Goods and Services Tax Act, 2017 Section 75(4)
M/S Super Enterprises v. Union of India, (Patna)(DB) : Law Finder Doc Id # 2969448
