IMPORTANT POINT
Cancellation of registration with retrospective effect must be based on objective criteria and supported by reasoning and particulars in the show cause notice and impugned order. The petitioner must be given an opportunity to object to the retrospective cancellation of registration.

JUDGMENT

Sanjeev Sachdeva, J. (Oral)

1. Petitioner impugns order dated 28.07.2023, whereby GST registration of the petitioner was cancelled with effect from 05.12.2022. Vide Show Cause Notice dated 17.04.2023, petitioner was called upon to show cause as to why the registration be not cancelled for the following reasons:

"Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax."

2. We may note that though the Show Cause Notice states that invoice or bill has been issued by the petitioner without supply of goods and/or services leading to wrongful availment or utilization of input tax credit or refund of tax. No particulars or details have been mentioned in the Show Cause Notice. There is no reference to any invoice or bill which the petitioner is alleged to have issued without making any supplies. It appears that the Show Cause Notice extracts the reason in a standard format as there are several other options mentioned in the reason i.e. "without supply of goods and/or services" and "leading to wrongful availment or utilization of input tax credit or refund of tax".

3. It appears that the respondents are using a template for issuing said notices without providing any particulars. There is no clarity as to whether the petitioner has issued invoices or bills without supply or the action of the petitioner has led to wrongful availment or utilization of input tax credit or refund of tax.

4. Further, the Show Cause Notice also does not mention the quantum of wrongful availment of input tax credit or any refund claimed on the said account. The impugned order also does not state any reasons for cancellation of the GST registration retrospectively except to state that no reply to the show cause notice has been received.

5. Perusal of the Notice also shows that it required the petitioner to appear before the under signed on 01.05.2023, however, the Notice neither bears the name, nor the designation of any officer who has issued the notice. Further, the application filed by the petitioner seeking revocation of the cancellation has been rejected by a cryptic order that the party did not respond to the query. The Show Cause Notice dated 31.08.2023 putting the petitioner to show cause for rejection of the application seeking revocation, did not raise any query but stated that reasons given in support of condonation were not correct or justification is insufficient. Once again there is no clarity as to what the petitioner was put to notice about, whether the reasons were not correct or justification was insufficient ? Said Show Cause Notice also required the petitioner to appear before the undersigned of the said notice, however, once again there is no name or designation of any officer in the said Show Cause Notice.

6. The impugned order also seeks to cancel the registration with effect from 05.12.2022. There is no material on record to show as to why the registration is sought to be cancelled retrospectively. There is no material to show that there was any wrongful availment or utilization of input tax credit effective from the date of registration till the issuance of the show cause notice.

7. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer's registration is required to be cancelled with retrospective date also covering the period when