Facts of the Case

M/s Surya Build Creations had its GST registration cancelled by an order dated 17.02.2025, pursuant to a show cause notice dated 29.01.2025, on the sole ground of 'filing NIL return since last two years'. The firm challenged both the notice and the cancellation order before the Uttarakhand High Court, arguing that filing NIL returns is not among the grounds enumerated for cancellation of registration under the GST Act.

Issues Involved

  1. Whether filing NIL GST returns for two consecutive years is a valid ground for cancellation of registration under Section 29(2) of the GST Act.

Petitioner's Arguments

  • Filing of NIL returns could not be a ground under the statute for cancelling registration, since Section 29(2) of the GST Act invests the proper officer with power to cancel registration only in the circumstances specifically enumerated therein, which does not include filing of NIL returns.
  • The Andhra Pradesh High Court's ruling in Kali Shanker Enterprises vs Additional Commissioner, Goods and Service Tax Officer, 2024 (1) TMI 430, directly supported this position and should be followed.

Respondent's Arguments

  • No submissions to the contrary appear to have been pressed by the State respondents once the petitioner's counsel placed the Kali Shanker Enterprises precedent before the Court.

Court Order / Findings

  • The Division Bench agreed with the view taken by the Andhra Pradesh High Court in Kali Shanker Enterprises that filing of NIL returns is not a ground contemplated under Section 29(2) of the GST Act for cancellation of registration.
  • Consequently, both the impugned show cause notice dated 29.01.2025 and the cancellation order dated 17.02.2025 could not survive and were quashed, and the writ petition was allowed.

Important Clarification

  • Section 29(2) of the CGST Act contains an exhaustive list of grounds for cancellation of registration by the proper officer; merely filing NIL returns for a continuous period, without more (such as non-filing altogether for the statutorily specified period), does not fall within any of those enumerated grounds.
  • This inter-High-Court consensus (Andhra Pradesh's Kali Shanker Enterprises, now followed by Uttarakhand) gives assessees a clear, portable precedent to resist cancellation notices premised solely on NIL filings.

Sections Involved

  • Section 29, CGST Act, 2017 – governs cancellation of registration; sub-section (2) enumerates the specific grounds available to the proper officer, held exhaustive on this point.

Decision – In Favour of

The writ petition was allowed entirely in favour of the assessee, with both the show cause notice and the cancellation order quashed.

Case Details

Court: High Court of Uttarakhand at Nainital. Case No.: Writ Petition (M/B) No. 179 of 2026. Neutral Citation: 2026:UHC:2257-DB. Coram: Hon'ble Chief Justice Manoj Kumar Gupta and Hon'ble Justice Subhash Upadhyay. Date of Order: 31st March, 2026.

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