GST Registration Cannot Be Cancelled Retrospectively Without Prior Issuance of SCN: High Court

The Punjab and Haryana High Court has set aside an order cancelling the GST registration of Turan Enterprises, holding GST registration cannot be cancelled retrospectively without prior issuance of a proper show-cause notice granting the taxpayer a fair opportunity to present his/her side.

In the present case, the GST authorities had retrospectively cancelled the petitioner’s GST registration through an order dated September 23, 2025. As a result, the petitioner filed a writ petition in the Punjab and Haryana High Court, arguing that no show cause notice was issued prior to the final order of GST cancellation, which is an explicit violation of the principles of natural justice.

In support of its case, the petitioner cited an earlier ruling in this court in a case titled ‘M/s Bansal Casting vs. Union of India’ and another, where the final decision was taken in favour of the petitioner taxpayer. In that case, the court had clarified that although Section 29 of the CGST Act permits retrospective cancellation of GST registration, such action can be taken only after following the principles of natural justice. Tax authorities are mandated to inform the taxpayer about the proposed action and the reasons for it, giving them a fair opportunity to respond.

The court in this case had held that, “A show cause proceeding is meant to give the person proceeded against a reasonable opportunity of making his objection against the proposed charges indicated in the notice. Thus, a show cause notice must contain the basic grounds or premises on which action is sought to be taken.”

To announce the final decision in the current case, the court referenced the earlier Supreme Court’s decision in Oryx Fisheries Private Limited vs. Union of India, which highlighted that a show-cause notice must contain the basic grounds on which action is proposed and that authorities must act fairly while exercising quasi-judicial powers.

Since the state was unable to distinguish the present case from the earlier ruling, the High Court set aside the impugned GST registration cancellation order. However, it granted liberty to the authorities to initiate fresh proceedings against the petitioner in accordance with law and after following due process. Accordingly, the writ petition was allowed.