Retrospective GST Registration Cancellation Order Lacking Prior SCN Proposal Is Invalid and Quashed

By | August 15, 2026
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Retrospective GST Registration Cancellation Order Lacking Prior SCN Proposal Is Invalid and Quashed
Issue
Whether a GST registration cancellation order passed with retrospective effect is legally sustainable when the underlying Show Cause Notice (SCN) did not propose or indicate retrospective cancellation.
Facts
  • Petitioner Status: The petitioner is a registered taxable person under the GST regime.
  • SCN Issued: The tax authority issued a Show Cause Notice (SCN) proposing the cancellation of the petitioner’s GST registration.
  • Lack of Retrospective Proposal: The SCN contained no reference, ground, or proposal to cancel the registration with retrospective effect.
  • Cancellation Order Passed: The respondent authority passed an order cancelling the petitioner’s GST registration retrospectively, going beyond the scope of the issued SCN.
  • Writ Petition Filed: The petitioner challenged both the SCN and the retrospective cancellation order via a writ petition before the High Court.
Decision
  • Order Beyond SCN Scope: The High Court held that a cancellation order operating retrospectively cannot be sustained if the underlying SCN failed to give explicit notice of proposed retrospective cancellation.
  • Quashing of Order & SCN: The impugned SCN and the resulting cancellation order were set aside for travelling beyond the scope of the notice.
  • Liberty to Issue Fresh SCN: The Court reserved liberty for the Revenue to issue a fresh SCN strictly in accordance with the law, without expressing any opinion on the merits of the case.
  • Outcome: Decided entirely in favor of the assessee.
Key Takeaways
  • Natural Justice & SCN Boundaries: An administrative or quasi-judicial order cannot exceed the specific allegations and proposed actions set out in the Show Cause Notice.
  • Explicit Notice Required for Retrospective Effect: If tax authorities intend to cancel a GST registration retrospectively under Section 29, the SCN must explicitly state the intention and period of retrospective cancellation to enable the taxpayer to defend themselves.
  • Procedural Flaw Invalidates Cancellation: Retrospective cancellation orders passed without prior notice in the SCN are null and void, requiring fresh proceedings if the Department wishes to pursue cancellation.
HIGH COURT OF PUNJAB & HARYANA
PS Enterprises
v.
Commissioner, Central Goods and Services Tax
Ashwani kumar Mishra, Actg. CJ.
and Rohit Kapoor, J.
CWP No. 24352 of 2026 (O & M)
AUGUST  6, 2026
Mukul Singla and Aryan Bindal, Advs. for the Petitioner. Ajay Kalra, Sr. Standing Counsel and Ms. Isha Janjua, Adv. for the Respondent.
ORDER
Ashwani Kumar Mishra, Actg. C.J.- The petitioner’s GST registration has been cancelled vide order dated 29.04.2026 (Annexure P-2) with retrospective effect from 27.10.2023. Show Cause Notice (SCN) for cancellation of registration was issued to the petitioner on 14.05.2026 (Annexure P-3). The said cancellation of GST registration is challenged by way of this writ petition primarily on the ground that the SCN issued, pursuant to which impugned order was passed, does not make reference to any retrospective cancellation.
2. Learned counsel for the petitioner has placed reliance upon the Division Bench judgment of this Court in Bansal Casting, S.K. Enterprises v. Union of India and Another and Shree Ram Industries v. State of Haryana 2026:PHHC:027747-DB/[2026]  108 GSTL 169 (Punjab & Haryana) to submit that in such circumstances, the impugned order cannot be sustained.
3. Learned counsel for the revenue does not dispute either the facts of the present case or the law laid down by the Co-ordinate Bench of this Court in Bansal Casting, S.K. Enterprises (supra).
4. Since, the controversy raised in the present petition is covered by the adjudication in Bansal Casting, S.K. Enterprises (supra), the impugned order dated 29.04.2026 (Annexure P-2) and SCN dated 14.05.2026 are ordered to be quashed and the writ petition stands disposed of in terms of the law laid down in Bansal Casting, S.K. Enterprises (supra). However, liberty stands reserved to the respondents to issue a fresh SCN and proceed further in accordance with law.
5. Pending application, if any, stands disposed of accordingly.