IMPORTANT POINT
Cancellation of GST registration with retrospective effect must be based on objective criteria and proper reasoning.

JUDGMENT

Sanjeev Sachdeva, J. (Oral) - Petitioner impugns order dated 28.02.2023 whereby the GST registration of the petitioner was cancelled retrospectively with effect from 08.10.2021. Petitioner also impugns Show Cause Notice dated 06.01.2023.

2. Issue notice. Notice accepted by learned counsel appearing for respondents. With the consent of parties, Petition is taken up for final disposal today.

3. Vide impugned Show Cause Notice dated 06.01.2023 petitioner was called upon to show cause as to why the registration be not cancelled for the following reasons:

"In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts."

4. Show cause notice dated 06.01.2023 was issued to the petitioner seeking cancellation of GST registration. The notice does not specify any cogent reason, and merely states "In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts". The show cause notice requires the petitioner to appear before the undersigned i.e., authority issuing the notice. However, the notice does not give the name of the officer or place where the petitioner has to appear.

5. Further the order dated 28.02.2023 passed on the show cause notice dated 06.01.2023 does not give any reasons for cancellation of the registration. It merely states "Neither the tax payer nor any authorised person on behalf of the tax payer appeared for personal Hearing. Accordingly, GST registration is being cancelled in terms of Sub-section (2) of Section 29 of the CGST Act, 201 7. The tax payer is directed to pay arrears of any tax, interest or penalty as applicable in your case and also submit all pending GST return including annual return as applicable and final return. You must preserve all records for audit or any other enquiry at the address given for future correspondence. The cancellation of registration shall not affect the liability of the person to pay tax and other dues 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." The order further states that effective date of cancellation of registration is 08.10.2021 i.e., a retrospective date.

6. In fact, in our view, order dated 28.02.2023 does not qualify as an order of cancellation of registration. On one hand, it states that the registration is liable to be cancelled and on the other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand.

7. Further, Show Cause Notice dated 20.07.2023 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, petitioner had no opportunity to even object to the retrospective cancellation of the registration.

8. The Learned counsel for the petitioner submitted that the petitioner filed an application for revocation of cancellation of GST registration on 24.03.2023. Pursuant to the said application, show cause notice dated 19.04.2023 was issued to the Petitioner, whereby it was stated "reason for revocation of cancellation-Reason for revocation of cancellation-The reason entered for revocation of cancellation is not appropriate" The show cause notice directed the petitioner to furnish a reply within seven working days and again required the petitioner to appear before the undersigned i.e. authority issuing the notice. However, the said notice again did not given the name of the officer or place where the petitioner had to appear.

9. Petitioner submitted a reply by uploading it on the portal, however, the authorities without considering the reply submitted by the Petitioner issued order dated 24.05.2023 for rejection of Application for revocation which merely stated "As per report of RO in E office File No. GEXCOM/Tech/GST/3800/2022-CGtShTe, taxpayer has obtained GSTIN on forged documen