High Court Sets Aside Retrospective GST Registration Cancellation for Lack of SCN Basis

The petitioner, M/s Modi Packers, a sole proprietary concern of Mr Mohit Modi, was granted GST registration with effect from 1st July, 2017. A show cause notice dated 5th April, 2023, was issued proposing cancellation of GST registration on allegations of fraud and wilful misstatement. The petitioner replied on 12th April, 2023, furnishing details of its updated operational address, which had already been amended in the GST records. Still, no physical inspection was carried out at the new address, and the GST registration was cancelled.

The petitioner filed an appeal; however, the appellate authority dismissed the appeal on the grounds of limitation. Aggrieved, the petitioner approached the High Court seeking restoration of the GST registration, contending that retrospective cancellation was neither contemplated in the show cause notice nor supported by reasons in the cancellation order.

Question of Law: Whether GST registration can be cancelled retrospectively when such retrospective cancellation was neither proposed in the show cause notice nor supported by reasons in the cancellation order.’

HC Held: The Hon’ble High Court allowed the writ petition and set aside the cancellation order dated 27th May, 2023. The Court held that the show cause notice did not contemplate retrospective cancellation, and the cancellation order was completely silent on the reasons for giving retrospective effect. The order also failed to deal with the petitioner’s reply to the show cause notice.

The Court reiterated that retrospective cancellation of GST registration cannot be sustained unless specifically proposed in the show cause notice and supported by reasons. Thus, the GST registration of the petitioner was restored. The petitioner was directed to file all pending returns along with applicable late fees and penalties by 15th January, 2026.

To Read Full Judgment, Download PDF Given Below