Retrospective GST registration cancellation requires clear notice and seven working days to respond; defective notice invalidates the order.

Retrospective cancellation of GST registration is valid only where the taxpayer is specifically told that such cancellation is proposed and is given the statutory opportunity to reply. Rule 22 of the CGST Rules requires a show cause notice in FORM GST REG-17 and at least seven working days from service of notice to file a response. A notice that omits the retrospective cancellation proposal, or is served without the required reply time, fails statutory compliance and fair procedure. On the stated facts, a later notice and email did not cure the defect, so the cancellation order was set aside as unlawful.

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Issues: Whether the retrospective cancellation of GST registration was valid when the show cause notice did not specifically propose retrospective cancellation and the assessee was not afforded seven working days to respond.

Analysis: Retrospective cancellation of GST registration is permissible, but only when the assessee is put to clear notice of that proposed action and is given the statutory opportunity to respond. Rule 22 of the Central Goods and Services Tax Rules, 2017 requires a show cause notice in FORM GST REG-17 and grants at least seven working days from service of notice to file a reply. A notice that does not disclose the proposal for retrospective cancellation, or which is served without the mandated response time, does not satisfy the statutory requirement or the standard of fair procedure. On the facts, the later notice and email did not cure the defect because the petitioner was not afforded the prescribed time before the cancellation order was passed.

Conclusion: The retrospective cancellation of GST registration was unlawful and the cancellation order was set aside. The action was held to be in violation of Rule 22 of the Central Goods and Services Tax Rules, 2017 and the requirement of fair notice.

Ratio Decidendi: Retrospective cancellation of GST registration can be sustained only if the assessee is specifically put to notice of that proposal and is granted the statutory period of at least seven working days to .

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