HC Restores GST Registration of boAt; Holds Revenue’s Approach Cavalier

Introduction

The Hon’ble Delhi High Court (“HC”) in the case of M/s. Imagine Marketing Limited Vs. Joint Commissioner CGST Appeals II Delhi & Anr¹restored the GST registration of M/s. Imagine Marketing Ltd, the owner of consumer electronics brand “boAt”, and upheld that the cancellation of GST registration was wholly unjustified, mechanical, and violative of fundamental principles of reasoning and fairness. The HC observed that the Adjudicating Authority failed to consider the replies and documents filed and proceeded to pass mechanical, templated and computer-generated orders without any application of mind.

The HC further observed that all GST returns and requisite forms were available on the GST Portal and repeatedly calling for the same from the taxpayer was not justified. HC underscored that an Adjudicating Authority must show fairness, especially in the case of companies that are regular taxpayers and have filed the replies in time along with the requisite documents.

Facts

• The Assessee and the appellant in this case is M/s. Imagine Marketing Limited (“boAt”).
• A Show Cause Notice (SCN) was issued to the Assessee on October 15, 2024, proposing cancellation of its GST registration on vague and unspecified grounds, merely stating “Non-Existent” and issues relating to returns under Section 39 of the CGST Act, without assigning any reasons.
• In response, the Assessee filed a detailed reply within the stipulated time, enclosing the relevant lease agreements and copies of GST returns for the preceding months. Nevertheless, a cancellation order was passed on November 26, 2024, with effect from October 15, 2024.
• The Assessee’s application seeking revocation of the cancellation of GST registration was rejected on January 08, 2025, in a mechanical manner, without examining the documents submitted on record.
• The Assessee thereafter filed an appeal before the Appellate Authority, which was rejected on April 30, 2025, on the ground that the Assessee did not submit the relevant documents.
• The Assessee filed a writ petition before the HC under Articles 226 and 227 of the Constitution of India challenging the Order for Cancellation of Registration dated November 26, 2024.

Assessee’s Contention

• The cancellation order was passed mechanically, without assigning any reasons and without considering the detailed replies and documents submitted in response to the SCN.
• The effective date of cancellation (October 15, 2024) was fixed arbitrarily, without any justification or reasoning.
• Despite the requisite documents being available on the GST portal and having been furnished again, the authorities repeatedly sought the same and rejected the revocation application and appeal without due consideration, violating the principles of natural justice.

Issues raised before the High Court

1. Whether cancellation of GST registration by a mechanical and unreasoned order, without consideration of the Assessee’s replies and documents, was legally sustainable??
   1. Whether rejection of the revocation application and dismissal of the appeal, despite records being available on the GST portal, reflected lack of fairness in adjudication?

Decision of the High Court

1. Whether cancellation of GST registration by a mechanical and unreasoned order, without consideration of the Assessee’s replies and documents, was legally sustainable?
2. The HC considered the rival submissions and observed that the index of the appeal filed by the Assessee reveals that copies of the screenshots, the replies, etc. were all filed. Therefore, the Appellate Authority’s order stating that the Assessee only submitted copies of lease deed & electricity bill, is completely erroneous.
3. The HC stated that the Adjudicating Authority failed to consider any of the replies and documents filed by the Assessee and that it passed mechanical, templated and computer-generated orders without any application of mind.
4. The HC set aside the Appellate Authority’s Order, the impugned order and the order dated January 08, 2025, rejecting the Assessee’s application for revocation of cancellation of GST registration. The HC observed that said orders lacked basic reasoning and did not show even fundamental fairness of adjudication.
5. Accordingly, the GST registration of the Assessee was restored.
6. The HC directed that the SCN dated October 15, 2024, be adjudicated afresh and replies filed by the Assessee be considered by the Adjudicating Authority in addition to the grant of a personal hearing to the Assessee.
7. The HC imposed cost of Rs. 25,000 on the Department to be paid to the Assessee, recoverable from Mr. Pradeep Kumar, Superintendent.
   1. Did the authorities act fairly and follow principles of natural justice in rejecting the revocation and appeal?
8. The HC stated that an Adjudicating Authority must show basic fairness, especially in the case of companies which are regular taxpayers and who have filed the replies in time along with the requisite documents.
9. The HC further observed that the GST returns and forms thereof were all available on the GST Portal and repeatedly calling for the same from the Assessee was not justified.
10. Terming the approach of the Adjudicating Authority as “cavalier”, the HC held that such an order lacked basic reasoning and fundamental fairness of adjudication.

Conclusion

The Delhi HC ruled in favour of the Assessee and restored the GST registration of M/s. Imagine Marketing Ltd. (boAt) concluding that the cancellation of GST registration and the subsequent rejection of revocation were unjustified. The HC observed that the authorities have passed mechanical, templated and computer-generated orders without any application of mind and a fresh adjudication of the SCN issued was ordered.

Further, the HC underscored that an Adjudicating Authority must show fairness, especially in the case of companies that are regular taxpayers and have filed the replies in time along with the requisite documents.

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¹W.P.(C) 17699/2025