TaxTMI 
TaxTMI 
2026 (3) TMI 573
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....Goods and Services Tax Act, 2017/Haryana Goods and Services Tax Act, 2017 (for short CGST/HGST Act) could have been cancelled with retrospective effect even though it is not so proposed in show case notice(s), Form GST-REG-17, issued to petitioners; (ii) whether proceedings are vitiated as supportive documents stated to be attached as per show causes notice(s) for case specific details were never supplied to petitioners and (ii) whether orders of Cancellation of Registration ultimately passed, are unsustainable being totally non-speaking and cryptic. Reference is made to provisions of CGST Act with State legislation having identical provisions; reference thereto be taken as reference to State legislation wherever applicable. 2. Learned counsel for petitioners submit that in all these writ petitions show cause notice(s) issued to the parties do not propose retrospective cancellation of petitioners' registration; supportive documents stated to be attached with show cause notice(s) were never uploaded/supplied to petitioners and that orders of cancellation of registration are non-speaking and cryptic. 3. Brief facts in each of the writ petitions are as under :- CWP-16770-....
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....5 (Annexure P-1) for cancellation of its registration with the remark "auto- generated details of your inward supplies for the period 17.01.2025 to 31.05.2025". It is further stated that no stock of iron, copper, scrap, iron-steel was found at place of business at the time of inspection. It is averred in the writ petition that petitioner explained to authorities that it is a trading unit and does not require any unloading or storage of goods. Moreover, no inspection report or any other document was supplied. 5.2 Order for cancellation of registration was passed on 28.08.2025 (Annexure P-2) w.e.f. 17.01.2025 with the remark "As per the information received from State GST Office vide DIN 1086 dated 03.07.2025 (Copy of letter attached)". It is stated that no attachment whatsoever was supplied with the impugned order. Cancellation was made effective from 17.01.2025. 5.3 Reply to writ petition on behalf of respondents has been filed justifying the passing of impugned order. Objection has also been raised to maintainability of writ petition on the premise that petitioner has an alternate efficacious statutory remedy of filing an appeal under Section 107 of CGST Act. Submissions ....
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....n :- 9. We have heard learned counsel for parties and have carefully perused the files with their able assistance. 10. At the outset, it is relevant to refer to the applicable provisions of law. Chapter VI of CGST/HGST Act deals with registration. Reference is made to provisions of CGST Act with State legislation having identical provisions; reference thereto be taken as reference to State legislation wherever applicable. Section 22 of CGST Act lists the persons liable for registration under the CGST Act. Section 24 of CGST Act provides for compulsory registration in certain cases, while Section 25 thereof details the procedure for registration. The procedure to obtain registration under Section 25 is prescribed in Rules 8, 9 and 10 of CGST Rules. Section 29 of CGST Act providing for cancellation or suspension of registration, reads as under :- Section 29 : Cancellation or suspension of registration: (1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to....
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....x Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under this Act. (5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed: Provided that in case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher. (6) The amount payable under sub-section (5) shall be calculated in such manner as may be prescribed. 11. Thus, circumstances in which registration can be can....
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.... to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22. [(2A) Where, a comparison of the returns furnished by a registered person under section 39 with (a) the details of outward supplies furnished in FORM GSTR-1; or (b) the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1, or such other analysis, as may be carried out on the recommendations of the Council, show that there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person, his registration shall be suspended and the said person shall be intimated in FORM GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.] (3) A registered person, whose registration has been s....
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....e date of application submitted under [sub-rule (1) of] rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1),[or under sub- rule (2A) of rule 21A] cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29. (4) Where the reply furnished under sub-rule (2) [or in response to the notice issued under sub-rule (2A) of rule 21A] 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 sub-section (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] (5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased propri....
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....tion. 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 circumstances so warrant. When tested on the aforesaid precepts it becomes ex facie evident that the impugned order of cancellation cannot be sustained." 16. In all the present writ petitions, it is a matter of record that there is no proposal whatsoever for retrospective cancellation of petitioners' registration in the show cause notice(s) which were issued. Relevant portion of Show Cause Notices in the three writ petitions read as under :- CWP-16770-2024 17.1 "discrepancies noticed while conduct of physical verification" CWP-21710-2025 17.2 "during inspection f....
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....on in these petitions reads as under :- CWP-16770-2025 19.1 "This has reference to show cause notice issued dated 09/08/2023. The effective date of cancellation of your registration is 29/06/2022. 3. It may be noted that a registered person furnishing return under sub-section (1) of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR-10 within three months of the date of this order. 4. You are required to furnish all your pending returns. 5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation." CWP-21710-2025 19.2 "This has reference to show cause notice issued dated 30/06/2025. Whereas no reply to the show cause notice has been submitted; and whereas, the undersigned based on record available with this office is of the opinion that your registration is liable to be cancelled for following reaso....
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....ation of mind by the authority but depict issuance of cyclostyled orders. The entire proceedings, thus, are unsustainable. 21. In the given facts and circumstances, present cases indeed fall in the exceptions as have been carved out by Hon'ble the Supreme Court in M/s Godrej Sara Lee Ltd. Versus The Excise And Taxation Officer-cum- Assessing Authority & Ors. 2023 AIR Supreme Court 781, wherein this Court would exercise jurisdiction to interfere in matters despite availability of an alternate remedy. 22. No other argument has been advanced. 23 Keeping in view the facts and circumstances as above, all the above said three writ petitions are thus allowed as under :- CWP-16770-2024 23.1 Impugned order of cancellation of registration dated 11.01.2024 (Annexure P-5) as well as show cause notice dated 09.08.2023, are set aside. Liberty is afforded to respondent-authorities to take necessary steps for recovery of any tax, penalty or interest, which may be due in respect of the subject firm, in accordance with law, including retrospective cancellation of GST registration, after affording proper notice and an opportunity of hearing, in accordance with law. Petitioner shall....