Order for non-granting GST registration must be a speaking order


The Hon’ble Madras High Court in the matter ofM/s B.C. Mohan Kumar v Superintendent of Central Goods & Service Tax [W.P. No. 13272 and WMP. Nos. 12569 & 12571 dated June 16, 2022] has held that the order for cancelling the GST  registration must be a speaking order and the discretion provided to the department in such cases shall not be used blatantly to violate the principles of natural justice.


M/s B.C. Mohan Kumar (“the Petitioner”) had made an application seeking registration in accordance with Section 22 read with Section 25 of the Central Goods and Services Tax Act (“the CGST Act”). The registration  was in respect of a rice mandi, for which the application is duly acknowledged, and physical verification was also undertaken. A notice was issued by the Superintendent of Central Goods & Service Tax (“the Respondent”) for seeking clarification as the application did not enclose the details of principal place of business of the Petitioner, which was duly responded by the Petitioner by uploading a copy of rental deed as his principal place of business. An order (“the impugned order”) was passed rejecting the application without assigning any reasons for the rejection. The Petitioner assails the impugned order is cryptic and entirely non-speaking, whereas, as per the Respondent, the word ‘may’ in Rule 9(4) of the CGST Act grants discretion to the authority for assigning  reasons.


  • Whether the impugned order for rejection of registration application was cryptic and non-speaking?


The Hon’ble Madras High Court in [W.P. No. 13272 and WMP. Nos. 12569 & 12571 dated June 16, 2022] held as under:

  • The stated  order is non-speaking, arbitrary and evidently has not taken into account the explanation furnished by the Petitioner.
  • Stated that, the word ‘may’ only refer to the discretion to reject and not to blatantly violate the principles of natural justice.
  • Noted that, if the assessing authority is inclined to reject the application, he must have assigned  the reasons for such objection and adhere to proper procedure, including due process.
  • Held that, the impugned order is set aside and the Petitioner be heard on the objection raised and the application for registration shall be granted.

(Author can be reached at info@a2ztaxcorp.com)

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CA Bimal Jain
A2Z Taxcorp LLP is a boutique Indirect Tax firm having its offices at New Delhi and Guwahati specializing in GST, Central Excise, Custom, Service Tax, VAT, DGFT, Foreign Trade Policy, SEZ, EOU, Export – Import Laws, Free Trade Policy, etc. It is a professionally managed firm having a team of experienced and distinguished Chartered Accountants, Company Secretary, Lawyers, Corporate Financial Advisors and Tax consultants to provide various services like litigation and representation, transaction advisory, diagnostic reviews/ health checks, audit defense & protection, retainership & compliance, configuration of tax efficient business model etc. Its clientele consists mainly of Foreign MNC, large/mid-sized Indian companies which includes exporters, FMCG, consumer durables, automobiles, aerated beverages, ceramic tiles, real-estate, hospitality, etc. Our clients include Varun Beverages Limited, Kajaria Ceramics Limited, L.G. Electronics India Private Limited, Shipra Hotel Limited, Multani Pharmaceuticals Limited, Shangri-La Eros Hotel etc. Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase–I, Delhi – 110091 India Desktel:+91-11-42427056 Mobile:+91 8076563802 info@a2ztaxcorp.com www.a2ztaxcorp.com
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