GST registration cancellation cannot be made retrospective without clear notice and recorded reasons.

Retrospective cancellation of GST registration is valid only where the statutory conditions are met and the authority records reasons for invoking that power. A show cause notice must clearly inform the taxpayer that retrospective cancellation is proposed and disclose the basis for that action so an effective reply can be made. Where the notice is confined to a limited factual allegation and gives no indication of retrospective effect, the cancellation cannot be sustained. The consequential rejection of revocation and the appellate order also fail because they rest on the invalid cancellation.

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Issues: Whether retrospective cancellation of GST registration could be sustained where the show cause notice did not disclose that cancellation was proposed with retrospective effect and did not set out the basis for such action.

Analysis: Retrospective cancellation under the CGST framework is permissible only when the statutory conditions are satisfied and the authority records reasons for invoking that power. A show cause notice must put the assessee to notice of the proposed action and the grounds on which it is founded, so that an effective response can be made. Where the notice is confined to a limited factual allegation and does not indicate retrospective cancellation, the action taken on that basis cannot be sustained. The revocation rejection and the appellate order, being consequential to the invalid cancellation, also cannot survive.

Conclusion: The retrospective cancellation of GST registration was not sustainable and the challenge succeeded in favour of the petitioner.

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