Retrospective GST registration cancellation requires prior notice and reasons; otherwise the registration must be restored.

A GST registration cancellation with retrospective effect cannot be sustained unless the taxpayer is put on notice of that proposal and the order records reasons for operating from the original date of registration. Here, the show cause notice only proposed cancellation for non-filing of returns and did not seek retrospective cancellation, while the cancellation order gave no justification for backdating the cancellation. The court therefore held the retrospective cancellation unsustainable and directed restoration of the registration forthwith, noting that restoration would enable compliance, including filing returns and discharging tax dues.

---

---

Issues: Whether the cancellation of GST registration could be sustained where the show cause notice did not propose retrospective cancellation and the cancellation order gave no reasons for cancelling the registration with effect from the date of grant, and whether the registration was liable to be restored.

Analysis: The show cause notice only called upon the taxpayer to explain why the registration should not be cancelled for non-filing of returns. It did not put the taxpayer to notice that retrospective cancellation was proposed. The cancellation order also did not record any reasons justifying cancellation from the original date of registration. The Authority noted the concession that restoration of registration would enable the taxpayer to file returns and discharge tax dues, and referred to the period available for revocation-related compliance under Rule 23(1) of the Central Goods and Services Tax Rules, 2017.

Conclusion: The retrospective cancellation was unsustainable and the registration was directed to be restored forthwith. The petition was allowed and disposed of accordingly.

Ratio Decidendi: A cancellation of GST registration with retrospective effect cannot be sustained unless the taxpayer is put to notice of that proposal and the order records reasons supporting such retrospective operation.

---