TaxTMI 
TaxTMI 
2025 (9) TMI 460
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....iod. However, thereafter, the returns have in fact been filed by the Petitioner. 4. The submission on behalf of the Petitioner by Mr. Gaurav Gupta, ld. Counsel is that under Rules 22 (1) and (4) of the Central Goods and Service Tax Rules, 2017 (hereinafter "CGST Rules"), once the returns have been filed, the proceedings under Section 29 of the Central Goods and Services Tax Act (hereinafter "the Act") have to be dropped. 5. It is relevant that in the impugned order dated 18th March, 2025, the ground for cancellation of registration is that on physical verification of the business premises of Petitioner it was found to be non-existent. 6. Insofar as this aspect is concerned, it is submitted by ld. counsel for the Respondent that the revocation of cancellation has already been sought by the Petitioner, wherein an alternative address of the Petitioner has also been given. 7. Thus, the grievance of the Petitioner in the present petition is the retrospective cancellation of the registration of the Petitioner. The further grievance of the Petitioner is that an alert notice has been issued on 27th May, 2025 against the Petitioner to various buyers and other business acquaintan....
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....e 22 reads as under: "22. Cancellation of registration.-(1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29, he shall issue a notice to such person in FORM GST REG-17,requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled. [...] (4) Where the reply furnished under sub-rule (2) is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20: Provided that where the person instead of replying to the notice served under sub-rule (1) for contravention of the provisions contained in clause (b) or clause (c) of subsection (2) of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST-REG 20." 15. In terms of the above, upon the pending returns and payment of taxes being paid with interest and late fee, the proper officer ought to have passed the order in FORM GST REG-20. Ins....
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....ase, the order has gone much beyond the reasons stated in the SCN as the Petitioner has never been put to notice that it was not existing in the business premises. 18. 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 'RidhiSidhi Enterprises v. Commissioner of Goods & Service Tax (CGST), South Delhi &Anr. (W.P.(C) 8061/2024)'. 19. 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 by the petitioner. The Central Tax, State Tax, Integrated Tax a....
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....not with retrospective effect from 11.09.2017. 15. The impugned order is modified to the aforesaid extent." 21. 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 retrospectively can neither be robotic nor routinely applied unless c....
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....etrospective 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 04.09.2021 does not give any reasons for cancellation. It, how....