TaxTMI 
TaxTMI 
2025 (8) TMI 1390
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....ner was suffering from pancreatic illness. In response to the said application for cancellation of registration, a query was raised by the GST Department on 31st March, 2021 to the following effect: "Notice for Seeking Additional Information/ Clarification/ Documents relating to Application for Cancellation This is with reference to your Cancellation application filed vide ARN AA070321082555B Dated - 30/03/2021 The Department has examined your application and is not satisfied with it for the following reasons: Cancellation Details - Others (Please specify) - As per the returns, there is mismatch of Rs. 315576/between GSTR-1 and GSTR 3B. 2. A disproportionately large amount of ITC was availed for payment of tax. Please clarify the same. You are directed to submit your reply by 08/04/2021 If no response is received by the stipulated date, your application is liable for rejection. Please note that no further notice/ reminder will be issued in this matter." 4. No reply was filed by the Petitioner to the said notice. Thereafter, on 9th April, 2021 the said application of the Petitioner was rejected....
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....concerned officer. On the one hand, the Petitioner's application for cancellation of registration is rejected and on the other hand, an order has been passed cancelling the registration retrospectively w.e.f. 15th June 2019. 9. The settled legal position is that if the SCN does not contemplate retrospective cancellation, the order cannot be passed directing retrospective cancellation. This position has been reiterated by this Court in various decisions including in 'Subhana Fashion v. Commissioner Delhi Goods and Service Tax (W.P. (C) 12255/2024)', "M/S Balaji Industries v. The Principal Commissioner CGST Delhi North Commissionerate & Anr. (W.P.(C) 11913/2024)' and 'Ridhi Sidhi Enterprises v. Commissioner of Goods & Service Tax (CGST), South Delhi & Anr. (W.P.(C) 8061/2024)'. 10. The relevant portions of the decision in Subhana Fashion (supra)is as under: "10. It is apparent to note that non-payment of dues for a period of three months is not a prescribed ground for cancelling the petitioner's GST registration. 11. It is also important to note that the impugned order sets out a tabular statement, which indicates that no amount has been determined as payable ....
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....from 24.05.2022 (being the date on which it was suspended) and not with retrospective effect from 11.09.2017. 15. The impugned order is modified to the aforesaid extent." 12. The relevant part of the judgment in 'Riddhi Siddhi Enterprises (supra)' is as under: "5. As is manifest from a reading of Section 29, clauses (a) to (e) of Section 29(2) constitute independent limbs on the basis of which a registration may warrant cancellation. While the provision does enable the respondents to cancel that registration with retrospective effect, the mere existence or conferral of that power would not justify a revocation of registration. The order under Section 29(2) must itself reflect the reasons which may have weighed upon the respondents to cancel registration with retrospective effect. Given the deleterious consequences which would ensue and accompany a retroactive cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind. It is also necessary to observe that the mere existence of such a power would not in itself be sufficient to sustain its invocation. What we seek to emphasise is that the power to cancel retros....
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....effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. 11. The show cause notice does not even state that the registration is liable to be cancelled from a retrospective date. 12. The petition is allowed. The impugned show cause notice dated 07.04.2022, order of cancellation dated 13.07.2022 and the order in appeal dated 29.12.2023 are accordingly set aside. GST registration of the petitioner is restored, subject to petitioner filing requisite returns upto date." 7. We further take note of the judgment in Delhi Polymers vs Commissioner, Trade and Taxes & Anr. wherein the following was observed:- "1-3..... 4. Show Cause Notice dated 04.09.2021 was issued to the Petitioner seeking to cancel its registration. However, the Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. 5. Further, the impugned order dated 15.12.2021 passed on the Show Cause Notice dated 04.09....