Prayagraj: The Allahabad High Court has pulled up GST authorities for passing frequent orders for the cancellation of GST registration of traders without assigning reasons and said it amounted to ‘economic death’ as it inflicts disproportionate hardship on them and disrupts legitimate business activities.The court in its judgment dated Nov 20 highlighted that depriving a dealer of this statutory lifeline, without assigning reasons or affording adequate opportunity, is antithetical to both the letter and spirit of the GST law. Allowing a writ petition filed by M/S Anil Art and Craft, a division bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla set aside the order dated Oct 15, 2025, passed by assistant commissioner, state tax, Bhadohi sector-1, cancelling petitioner’s GST registration with retrospective effect from Oct 8, 2025. Prior to this, a show cause notice in Form GST REG-17 had been issued alleging wrongful availment and passing on of bogus input tax credit in violation of section 16 of the GST law, based on a DGGI survey and alleged dealings with non-existent suppliers. The bench observed that merely stating that a reply is “not satisfactory” reveals only the conclusion of the authority and not the reasoning which led to that conclusion, thereby failing the minimum standard of a reasoned administrative order. Emphasising that recording of reasons is a “sine qua non” of fair procedure, the court noted that this requirement is so fundamental that even a law student would recognise it as non-negotiable. The court remarked that the officer had acted “carelessly” and in “complete defiance” of basic procedural safeguards, questioning what could have compelled such a non-speaking order in a matter carrying grave civil consequences. Underlining the severity of cancellation of GST registration, the court described such an action as virtually announcing the “economic death” of a business entity in a regime where registration is the gateway for issuing tax invoices and availing or passing on input tax credit. Once registration is cancelled, the taxpayer is effectively disabled from participating in the formal supply chain, even as past tax liabilities, returns, and obligations continue. The court directed that a copy of the judgment and petition be communicated to the commercial tax commissioner, who has been asked to issue appropriate instructions within 15 days to all GST officers dealing with registration cancellation. These instructions must specifically provide for penal consequences against officers who pass non-speaking orders or deny reasonable opportunity in such matters, so that similar lapses are not repeated, the court added.