GST Retrospective Cancellation Notice Reconsideration Ordered by High Court

The High Court directed the GST authorities to reconsider proceedings initiated for retrospective cancellation of GST registration after taking into account the assessee’s reply and supporting documents. A Division Bench comprising Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul disposed of the writ petition filed by M/s Maruti Enterprises challenging a show cause notice issued under Section 29(2)(e) of the Central Goods and Services Tax Act 2017.

The petitioner, a proprietorship concern registered under the GST regime with effect from 29 September 2023, had earlier applied for voluntary cancellation of its registration on account of financial difficulties and slowdown in business operations. Pursuant to the submission of documents sought by the department, the GST registration was cancelled through an order passed in Form GST REG-19 with effect from 24 January 2025.

Subsequently, the Department issued a fresh show cause notice dated 12 December 2025 in Form GST REG-17 proposing retrospective cancellation of registration from the original date of registration, i.e., 29 September 2023. The notice alleged that the registration had been obtained through wilful misstatement or suppression of facts and referred to a report of the Anti-Evasion Wing stating that the petitioner was not found functioning at the principal place of business.

The petitioner challenged the notice before the High Court, contending that once the registration had already been voluntarily cancelled and no revocation application had been filed, initiation of fresh proceedings for retrospective cancellation was impermissible. It was further argued that the reply submitted by the petitioner on 23 December 2025 had not been considered by the authorities.

“The petitioner also stated that the aspect of wrongful availment of input tax credit was misplaced.”

During the hearing, counsel appearing for the Revenue submitted that the petitioner’s reply would be duly considered and a reasoned order would be passed in accordance with law.

Taking note of the submission, the High Court observed that the petitioner’s response to the impugned show cause notice was still pending adjudication and required fresh consideration by the competent authority.

“It is considered appropriate that the matter be examined afresh by the competent authority upon due consideration of the Petitioner’s response.”

Thus, the court directed the petitioner to appear before the concerned authority with all supporting documents and written submissions and instructed the department to pass an appropriate order within two weeks. The writ petition was disposed of in these terms.

To Read Full Judgment, Download PDF Given Below