Retrospective cancellation of GST registration requires clear notification and reasons in the show-cause notice; failure renders such cancellation invalid.

JUDGMENT :

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

2. This is a petition challenging the order dated 19^th August, 2024 cancelling the GST registration of the Petitioner. The grievance of the Petitioner is that it has been cancelled with retrospective effect from 8^th October, 2019.

3. Ld. Counsel for the Petitioner submits that the reason given is non- compliance of Rule 10A of the Central Goods and Services Rules, 2017. The said provision reads as under:

“Rule 10A. Furnishing of Bank Account Details. - After a certificate of registration in FORM GST REG06 has been made available on the common portal and a Goods and Services Tax Identification Number has been assigned, the registered person, except those who have been granted registration under Rule 12 or, as the case may be Rule 16, shall within a period of thirty days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using invoice furnishing facility, whichever is earlier,furnish information with respect to details of bankaccount on the common portal.”

4. As per the said provision,the bank details have to be furnished within 30 days from the date of GST registration and the Petitioner had received its GST registration on 8^th October, 2019 with registration No. 07CEFPB4719A1Z3. Thus, it is the submission of the ld. Counsel for the Petitioner that in 2024 the Department could not have raised the said objection, belatedly after five years.

5. Ld. SSC for the Department, on the other hand, submits that the Show Cause Notice dated 6th August, 2024 (hereinafter, ‘SCN’) was the third SCN issued to the Petitioner in respect of cancellation of the GST Registration. The earlier two SCNs dated 20th December, 2023 and 14th May 2024 were not replied to by the Petitioner. Even the SCN dated 6^th August, 2024 has not been replied to and therefore, the retrospective cancellation order has been passed.

6. On a specific query, ld. Counsel for the Petitioner submits that there is no notice issued to the Petitioner or any of its customers/ purchaser in respect of fraudulent availment or passing of Input Tax Credit.

7. The Court has heard the parties and perused the documents placed on records. The settled legal position is that if the SCN does not contemplate retrospective cancellation, the order cannot be passed directing retrospective cancellation.ThispositionhasbeenreiteratedbythisCourtinvariousdecisions including in ‘Subhana Fashion v. Commissioner Delhi Goods and Service Tax ()’, “M/S Balaji Industries v. The Principal Commissioner CGST Delhi North Commissionerate & Anr. (W.P.(C) 11913/2024)’ and ‘Ridhi Sidhi Enterprises v. Commissioner of Goods & Service Tax (CGST), South Delhi & Anr. (W.P.(C) 8061/2024)’.

8. The relevant portions of the decision in Subhana Fashion (supra) is as under:

“10. It is apparent to note that non-payment of dues for a period of three months is not a prescribed ground for cancelling the petitioner’s GST registration.

11. It is also important to note that the impugned order sets out a tabular statement, which indicates that no amount has been determined as payable by the petitioner. The Central Tax, State Tax, Integrated Tax and Cess payable by the petitioner is reflected as, “0.0”.

12. Apart from the above, the impugned order has also been passed in violation of principles of naturaljustice. Although the SCN called upon the petitionerto appear for a personal hearing at the appointeddate and time, no such date or time was indicated.Thus, in effect the petitioner was not afforded anopportunity to be heard.
13. In view of the above, we set aside the impugnedorder. The respondents are directed to restore thepetitioner’s GST registration forthwith.”

9. The relevant part of the judgment in “M/s Balaji Industries (Vipin Kumar)(Supra) is as under:

“8. It is apparent from the above