2026 (3) TMI 726 - HC - GST

Retrospective GST registration cancellation quashed; respondents must reconsider the notice under conditional revival and compliance directions.

The petition contests a show cause notice proposing retrospective cancellation of the petitioner's GST registration from 01.07.2017; the court reviewed ... Validity of the show cause notice proposing cancellation of GST registration - Retroactive cancellation of GST registration - direction to follow precedent guidelines for revival and Regularisation. Retroactive cancellation of GST registration - HELD THAT:- The Court found that the impugned Show Cause Notice in Form GST Reg-17 which proposed cancellation of the petitioner's GST registration with effect from 01.07.2017 cannot be sustained and, to that extent, quashed. The challenge to the notice was disposed at the admission stage by recording that prospective or retroactive cancellation in the terms proposed was not permissible and therefore that portion of the notice was set aside. [Paras 7] The portion of the show cause notice proposing cancellation with effect from 01.07.2017 is quashed. Revival of GST registration subject to compliance with conditions - HELD THAT:- The Court directed the respondents to pass orders in response to the show cause notice by following the guidelines laid down in Tvl. Suguna Cut Piece Center [2022 (2) TMI 933 - MADRAS HIGH COURT] permitting revival subject to filing returns, payment of tax, interest, fines and fees, restrictions on utilization of Input Tax Credit until scrutiny and approval, and other safeguards to prevent misuse. The writ petition was disposed by applying those conditions to the present case and directing the authorities to act accordingly. [Paras 8, 9] Respondents must adjudicate the show cause notice in accordance with the Tvl.Suguna Cut Piece Center directions and may revive registration only upon fulfilment of the prescribed conditions and safeguards. Final Conclusion: The portion of the impugned notice proposing cancellation with effect from 01.07.2017 is quashed; the respondents are directed to decide the show cause notice afresh in accordance with the Court's guidelines in Tvl.Suguna Cut Piece Center, permitting revival of registration only upon compliance with the stipulated conditions and safeguards. Issues: Whether the impugned Show Cause Notice in Form GST Reg-17 dated 27.02.2026, which proposes cancellation of the petitioner's GST registration with effect from 01.07.2017, is sustainable and whether relief should be granted to the petitioner.Analysis: The petition challenges a notice proposing cancellation of GST registration effective from 01.07.2017, issued after inspection (13.11.2025), recording of statement under Section 67 of the Tamil Nadu Goods and Services Tax Act, 2017 (14.11.2025) and a related demand (DRC-01A dated 18.02.2026). The Court disposed the petition at admission with consent and examined the legality of proposing retrospective cancellation from 01.07.2017. The Court applied the principles of Article 226 of the Constitution of India and followed the guidelines and conditions set out by this Court in Tvl.Suguna Cut Piece Center (paras 227-229) relating to quashing of cancellation orders, conditional revival of registration, filing of returns, payment of tax/interest/penalty, and scrutiny and controlled utilisation of input tax credit.Conclusion: The portion of the Show Cause Notice that proposes cancellation of the petitioner's GST registration with effect from 01.07.2017 is quashed. The respondents are directed to pass orders on the show cause notice in accordance with the directions issued in Tvl.Suguna Cut Piece Center (including conditional revival, filing of returns, payment of tax/interest/penalty, and controlled scrutiny/use of input tax credit).