GST authorities directed to reconsider retrospective GST cancellation against taxpayer whose applied for voluntary cancellation

The Division Bench of The Delhi High Court Consist of Justice Nitin Wasudeo Sambre Justice Ajay Digpaul examined a petition filed by Maruti Enterprises, a small business run by Binod Singh, against the GST department. The case first arose when the company, facing financial problems, applied for voluntary cancellation of its GST registration in January 2025.

The GST office granted this request and cancelled the registration from that date. Then in December 2025, the GST department issued a new show cause notice stating registration was suspended retrospectively, starting September 2023, which was the original date of registration in this regard. The department said the registration was secured through misstatement or suppression of facts and referred to a report stating the firm was not found at its registered address and potentially could have wrongfully claimed input tax credit.

Maruti Enterprises contended that since the registration was already cancelled voluntarily and no revocation request had been filed, starting fresh proceedings for retrospective cancellation was not permitted. They also denied any claims about input tax credit.

The Court noted that the registration had indeed been cancelled earlier, and also that the petitioner had submitted a response to the new notice (which had not been considered). The GST department then made clear to the Court its intention was only to have the reply properly examined and a reasoned order passed.

The Court ordered Maruti Enterprises to report to the GST authority with all records and submissions and the department to finish the proceedings within two weeks. The petition was subsequently disposed of.

To Read The Judgement Download The PDF Given Below