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Have you ever felt that you explained everything to the tax officer, attended the hearing, submitted replies… and still received an order that looks like it was written without hearing you at all? This GST case from the Calcutta High Court is exactly about that frustration—and why the law does not permit it.

Summary (What, Why, Outcome)

In this case, the GST registration of S.K.M. Timber Private Limited was cancelled by a one-page order dated 9 December 2024. Although a show cause notice had been issued and the taxpayer had filed a reply, the final cancellation order did not discuss that reply or record any reasons. More importantly, the personal hearing notice was issued by one authority, while the final order was passed by another. The Calcutta High Court held that such an order showed no application of mind, violated settled principles of natural justice, and could not be cured by offering a post-decisional hearing. The cancellation order was therefore set aside, and the matter was sent back for a fresh hearing and a reasoned order.

Facts of the Case (Background)

The story begins with a show cause notice dated 14 March 2024, issued to S.K.M. Timber Private Limited proposing cancellation of its GST registration. The taxpayer did what any compliant business would do—it submitted a reply.

However, despite the reply, the CGST authorities did not conclude the proceedings. With no final order in sight, the taxpayer approached the Calcutta High Court by filing a writ petition. The Court disposed of that petition on 29 October 2024, directing the department to give an effective hearing and dispose of the matter in accordance with law within a specified period.

Following the Court’s direction, a hearing notice dated 22 November 2024 was issued by the Assistant Commissioner. Even after the hearing, no order was communicated. The taxpayer was again compelled to move the High Court, this time through a contempt petition, complaining that the earlier directions were not being followed.

Only after the contempt proceedings did the department communicate a one-page order dated 9 December 2024, cancelling the GST registration ab initio, that is, from a retrospective date. This order became the subject matter of the present writ petition.

Legal Issue

The core issue before the Court was simple, yet fundamental:

Can a GST registration be cancelled by an order that does not deal with the taxpayer’s reply, gives no reasons, and is passed by an authority different from the one who issued the hearing notice?

Closely linked to this was another question:

Can such defects be cured later by offering a post-decisional hearing?

Arguments

On behalf of the taxpayer, it was argued that:

• The show cause notice itself suffered from procedural defects.

• Despite filing a reply, the proceedings were not concluded, forcing repeated litigation.

• The hearing notice was issued by the Assistant Commissioner, but the final order was passed by the Superintendent, violating the settled principle that the authority who hears must decide.

On behalf of the department, it was contended that:

• The cancellation order was based on material placed on record by the investigation wing.

• At best, the taxpayer could be granted a post-decisional hearing, and the order should not be interfered with at this stage.

Court’s Decision

The Calcutta High Court examined the impugned order carefully and found it unsustainable.

First, the Court noted that although the order recorded that the taxpayer had filed a reply to the show cause notice, the reply was not dealt with at all. There was no discussion, no reasoning, and no explanation as to why the reply was unacceptable. The Court held that this clearly showed absence of application of mind.

Second, the Court reiterated a settled principle of law:

Reasons are the live link between the facts stated and the conclusion reached.

An order without reasons is not a mere procedural lapse—it becomes a nullity in the eyes of law.

Third—and most importantly—the Court found a serious flaw in the decision-making process. The personal hearing notice was issued by the Assistant Commissioner, but the final cancellation order was passed by the Superintendent. This, according to the Court, directly violated the well-established principle:

“One who hears must decide.”

In simple terms, the person who listens to the taxpayer cannot be different from the person who decides the fate of the taxpayer.

Legal Reasoning & Analysis

Why did the Court take such a strict view?

Because hearing is not a ritual. It is not a box-ticking exercise. When a law requires a hearing, it means the authority must:

1. Listen to the taxpayer,

2. Apply its own mind to the reply and submissions, and

3. Record reasons while reaching a conclusion.

If one officer hears the matter and another officer signs the order, the chain breaks. The decision becomes mechanical and detached from the hearing itself.

The Court also rejected the department’s suggestion of granting a post-decisional hearing. It made it clear that:

• Post-decisional hearing is not the normal rule.

• It is not meant for cases where the final order is passed without application of mind and without recording reasons.

• Such a hearing does not satisfy the principles of natural justice.

In short, you cannot repair a fundamentally bad order by saying, “We will hear you later.”

Important Message for Every Business Owner

Key Takeaways:

• Reply matters—but only if the order shows it was considered. If your reply is ignored, the order becomes vulnerable.

• Check who heard you and who signed the order. If they are different, it is a serious legal defect.

• Reasons are not optional. An order without reasons is legally weak, no matter how serious the allegations.

• Post-decisional hearing is not a magic cure. Courts will not accept it where the original order itself is flawed.

• Persistence pays. This case shows that insisting on procedural fairness can bring relief.

Why This Matters

GST registration cancellation can paralyze a business overnight. This judgment sends a clear message to tax authorities that procedural fairness is non-negotiable. It also reassures taxpayers that courts will step in when basic principles of natural justice are ignored.

Conclusion

This case is a reminder that in tax law, how a decision is taken is just as important as what decision is taken. Being heard by one officer and cancelled by another is not justice—it is a procedural failure. The Calcutta High Court’s ruling reinforces a simple but powerful truth: the listener must also be the decision-maker.

At GST DOST, we see cases like this every day. And every time, the lesson is the same—know your rights, insist on fair process, and don’t accept arbitrary orders quietly.

📞 Need help with a similar GST cancellation or hearing issue? Reach out to GST DOST for guided, practical support.

FAQ

Q: What was the main dispute in this case?

A: The dispute concerned cancellation of GST registration through a reasonless order passed by an authority different from the one issuing the hearing notice.

Q: What did the High Court decide?

A: The High Court set aside the cancellation order and directed a fresh hearing and a fresh, reasoned order.

Q: Why is “one who hears must decide” important in GST cases?

A: Because a hearing is meaningful only when the same authority applies its mind and takes the final decision.

Q: Can a defective GST order be cured by post-decisional hearing?

A: No. The Court held that post-decisional hearing does not satisfy natural justice where the original order is fundamentally flawed.

Q: What should taxpayers learn from this decision?

A: If the authority that conducts the hearing is different from the authority that passes the order, or if the order does not record proper reasons, such an order cannot survive judicial scrutiny and is likely to be set aside by the court.

References

• S.K.M. Timber Private Limited v. Superintendent of Central Tax, Calcutta High Court, Order dated 23 December 2025, WPA 11034 of 2025

Written by CA Vikash Dhanania | Reviewed by GST DOST Legal Research Team | Updated on 02/01/2026

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