Tvl. Vardhan v State Tax Officer

Facts

• TVL Vardhan was a registered dealer under the TGST/CGST Act
• Registration was cancelled by the State Tax Officer for non-filing of returns for 6+ months
• The cancellation order was passed without granting adequate opportunity of hearing
• The show cause notice was generic, not specifying the exact default period or remedy available
• Vardhan challenged the cancellation via writ petition

Issues

1. Whether GST registration can be cancelled without following natural justice principles
2. Whether non-filing of returns (a curable default) warrants the extreme step of cancellation
3. Proportionality of cancellation as a response to return-filing default

Held

• Cancellation of registration is a severe civil consequence; principles of natural justice must be followed
• The show cause notice was deficient: it did not specify the exact default or invite a response
• Non-filing is a curable default; the remedy is coercive filing/penalty, not cancellation
• Cancellation set aside; registration restored subject to filing all pending returns and paying dues with interest

Ratio Decidendi

Registration is the gateway to conducting taxable business. Its cancellation is quasi-penal and attracts natural justice protections. Where the default (non-filing) is remediable, the proportionate response is to compel compliance, not to extinguish the right to carry on business. Administrative convenience does not override due process.