Retrospective Cancellation invalid without proposal in notice; relied documents must be supplied and orders must state reasons.

Whether GST registration may be cancelled retrospectively was decided by applying the principle that retrospective cancellation is permissible only when expressly proposed in the show cause notice and supported by reasons and material; outcome: retrospective cancellation invalid where not proposed and unexplained. Whether proceedings are vitiated by non-supply of supporting documents was decided by holding that a notice must supply or identify relied material to enable response; outcome: proceedings vitiated. Whether a cryptic, non-speaking cancellation order is sustainable was decided by requiring a reasoned order evidencing application of mind; outcome: such orders are unsustainable.

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Issues: (i) Whether registration under the Central Goods and Services Tax Act, 2017 could be cancelled with retrospective effect when such retrospective cancellation was not proposed in the show cause notice; (ii) Whether proceedings are vitiated where supporting documents referred to in the show cause notice were not supplied to the registrant; (iii) Whether an order of cancellation that is cryptic or non-speaking and does not reflect reasons or application of mind is sustainable.

Issue (i): Whether registration under the Central Goods and Services Tax Act, 2017 could be cancelled with retrospective effect when such retrospective cancellation was not proposed in the show cause notice.

Analysis: Section 29 of the Central Goods and Services Tax Act, 2017 permits retrospective cancellation subject to the conditions contained therein. The power to cancel retrospectively must be exercised on specified contingencies and the order of cancellation with retrospective effect must reflect the reasons and premises for such action. A show cause notice initiating cancellation proceedings is required to put the registrant on notice of the specific proposal sought to be acted upon, including retrospective cancellation if intended.

Conclusion: Retrospective cancellation cannot be validly imposed where the show cause notice did not propose retrospective cancellation and the order does not state reasons justifying retrospective effect; conclusion is in favour of the assessee.

Issue (ii): Whether proceedings are vitiated where supporting documents referred to in the show cause notice were not supplied to the registrant.

Analysis: A show cause notice that refers to case-specific supporting documents must either supply such material or identify the material on which the authority relies, to enable effective response. Failure to supply or disclose the relied-upon supporting documents deprives the registrant of a meaningful opportunity to contest the proposal.

Conclusion: Proceedings are vitiated by non-supply of supporting documents; conclusion is in favour of the assessee.

Issue (iii): Whether an order of cancellation that is cryptic or non-speaking and does not reflect reasons or application of mind is sustainable.

Analysis: An order under Section 29 must demonstrate due application of mind and set out reasons for cancellation, particularly when retrospective effect is imposed. A cryptic or non-speaking order that merely records cancellation without referencing material or reasons fails to meet this requirement and cannot be sustained.

Conclusion: A cryptic or non-speaking cancellation order is unsustainable; conclusion is in favour of the assessee.

Final Conclusion: The impugned cancellation order is set aside; respondent-authorities are granted liberty to proceed lawfully, including serving proper notice, supplying relied-upon material, affording an opportunity of hearing, and passing a reasoned order if justified.

Ratio Decidendi: Section 29 of the Central Goods and Services Tax Act, 2017 permits retrospective cancellation only when expressly proposed and supported by reasons and material; absence of proposal in the show cause notice, failure to supply supporting documents, and issuance of a non-speaking order negate the validity of retrospective cancellation.

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