Retrospective GST registration cancellation is invalid if not proposed in the preceding Show Cause Notice.

By | September 26, 2026
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Retrospective GST registration cancellation is invalid if not proposed in the preceding Show Cause Notice.

Issue

Whether an order cancelling a taxpayer’s GST registration with retrospective effect is legally sustainable when the preceding Show Cause Notice (SCN) did not explicitly propose or mention cancellation with retrospective effect under Section 29 of the CGST Act.

Facts

  • Registration Cancellation: The petitioner, a registered person under GST, had their GST registration cancelled vide order dated 21.08.2023 with retrospective effect from 06.01.2023.
  • Omission in SCN: The Show Cause Notice issued prior to the cancellation order failed to propose or mention that the cancellation would be made with retrospective effect.
  • Writ Petition: The petitioner filed a writ petition challenging the validity and sustainability of the retrospective cancellation order on the ground of lack of notice and opportunity to contest the retrospective application.
  • Precedent Relied Upon: The issue was covered by the decision of the Co-ordinate Bench in Bansal Casting v. Union of India  108 GSTL 169 (Punjab & Haryana).

Decision

  • Quashing of Order: The High Court quashed the impugned cancellation order dated 21.08.2023 as the preceding SCN did not propose retrospective cancellation.
  • Concession by Revenue: The Court noted that the Revenue did not dispute the facts or the established law laid down in Bansal Casting v. Union of India.
  • Liberty Granted: Liberty was reserved to the Revenue authorities to issue a fresh SCN explicitly stating the intention and grounds for retrospective cancellation and proceed strictly in accordance with law.

Key Takeaways

  1. Natural Justice Mandatory: An order of cancellation cannot travel beyond the scope of the Show Cause Notice; retrospective cancellation without specific proposal in the SCN violates principles of natural justice.
  2. Strict Adherence to SCN Proposals: If the Revenue intends to cancel a GST registration retrospectively under Section 29, it must explicitly specify the proposed effective date of cancellation in the initial SCN to allow the assessee to respond effectively.
  3. Fresh Proceedings Permitted: Quashing an improper retrospective cancellation order does not prevent the tax authorities from issuing a proper SCN and initiating fresh, lawful proceedings.
HIGH COURT OF PUNJAB & HARYANA
Rajinder Parshad Goel and Sons HUF
v.
Superintendent, CGST
Ashwani Kumar Mishra, CJ.
and Rohit Kapoor, J.
CWP-16552-2025 (O & M)
SEPTEMBER  7, 2026
Nikhil Goyal, Adv. for the Petitioner. Ajay Kalra, Sr. Standing Counsel and Ms. Isha Janjua, Adv. for the Respondent.
ORDER
Ashwani Kumar Mishra, CJ.- The petitioner’s GST registration has been cancelled vide order dated 21.08.2023 (Annexure P-10) with retrospective effect from 06.01.2023. The said cancellation of GST registration is challenged by way of this writ petition primarily on the ground that the show cause notice issued, pursuant to which impugned order was passed, does not make reference to any retrospective cancellation. Learned counsel for the petitioner has placed reliance upon the Division Bench judgment of this Court in Bansal Casting v. Union of India 108 GSTL 169 (Punjab & Haryana) and Shree Ram Industries v. State of Haryana 2026:PHHC:027747-DB to submit that in such circumstances, the impugned order cannot be sustained.
2. Learned State counsel 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 (supra).
3. Since, the controversy raised in the present writ petition is covered by the adjudication in Bansal Casting (supra), the impugned order dated 21.08.2023 (Annexure P-10) is ordered to be quashed and the writ petition stands disposed of in terms of the law laid down in Bansal Casting (supra). However, liberty stands reserved to the respondents to issue a fresh show cause notice and proceed further in accordance with law.
4. Pending applications, if any, shall stand disposed of accordingly.
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