Retrospective GST registration cancellation upheld where fraud, suppression of facts and fake invoicing were found after enquiry.

Retrospective cancellation of GST registration was upheld because section 29 of the West Bengal GST Act permits cancellation from an earlier date where registration was obtained by fraud, wilful misstatement or suppression of facts. On the facts found in enquiry, the authority concluded that the entity was not carrying on genuine business and had misused registration for paper transactions and wrongful input tax credit, so the challenge to retrospective cancellation failed. The court also found no breach of natural justice or procedural impropriety, as adequate opportunity had been given, a physical enquiry had been conducted, and the orders were reasoned and based on factual findings. The writ challenge was therefore rejected and the revocation refusal sustained.

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Issues: (i) whether cancellation of registration with retrospective effect was justified where registration was found to have been obtained by fraud, wilful misstatement or suppression of facts and fake invoices were alleged to have been issued; (ii) whether the impugned orders were liable to be interfered with on the ground of violation of natural justice or procedural impropriety.

Issue (i): whether cancellation of registration with retrospective effect was justified where registration was found to have been obtained by fraud, wilful misstatement or suppression of facts and fake invoices were alleged to have been issued.

Analysis: Section 29 of the West Bengal Goods and Services Tax Act, 2017 draws a distinction between cancellation in ordinary cases and cancellation from a retrospective date. Retrospective cancellation is permissible where registration has been obtained by fraud, wilful misstatement or suppression of facts. The scheme of the Act does not permit entities to retain registration for the purpose of paper transactions and wrongful availment of input tax credit. On the facts found by the authorities, the petitioner was not shown to be carrying on genuine business and the material relied upon supported the conclusion that registration had been misused.

Conclusion: The cancellation of registration with retrospective effect was upheld and the challenge to that finding failed.

Issue (ii): whether the impugned orders were liable to be interfered with on the ground of violation of natural justice or procedural impropriety.

Analysis: The record showed that adequate opportunity had been given to the petitioner and that a physical enquiry had been conducted before the adverse orders were passed. The orders were reasoned and based on factual findings reached after enquiry. No cogent material was shown to demonstrate breach of natural justice, procedural illegality, or any other ground warranting interference in writ jurisdiction.

Conclusion: No violation of natural justice or procedural impropriety was established, and the impugned orders were sustained.

Final Conclusion: The challenge to the cancellation and the rejection of revocation failed, and the authorities' action was left undisturbed.

Ratio Decidendi: Where registration under the GST regime is found, on enquiry, to have been obtained by fraud, wilful misstatement or suppression of facts, retrospective cancellation is legally sustainable, and such orders will not be interfered with absent a demonstrated breach of natural justice or procedural illegality.

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