Facts of the Case

The petitioner, M/S Harish Spares (India), challenged an order dated 22.11.2024 cancelling its GST registration retrospectively with effect from 15.10.2019. The cancellation followed a show cause notice dated 06.11.2024 alleging the petitioner entity was not found existing at its place of business during a physical field visit. No reply was filed by the petitioner to the show cause notice. The petitioner produced an electricity bill to show that it continued functioning from the registered premises, though the bill was registered in the name of the proprietor's husband, leaving it unclear whether other supporting documents existed.

Issues Involved

  1. Whether a GST registration can be cancelled with retrospective effect where the underlying show cause notice never proposed or contemplated retrospective cancellation.

Petitioner's Arguments

  • The show cause notice dated 06.11.2024 alleged only non-existence at the place of business as found during a field visit; it did not propose or put the petitioner to notice of any retrospective cancellation.
  • An electricity bill was placed on record to demonstrate the petitioner's continued presence at the registered premises.

Respondent's Arguments

  • The petitioner entity was found non-traceable at the registered address during the field visit, and no reply was filed to the show cause notice.

Court Order / Findings

  • The Court held that since the show cause notice did not contemplate retrospective cancellation, the order directing cancellation of GST registration with retrospective effect was contrary to law, reiterating its consistent position in Subhana Fashion, Balaji Industries, and Ridhi Sidhi Enterprises.
  • The order dated 22.11.2024 revoking the registration was set aside.
  • The Department was granted liberty to withdraw the existing show cause notice and issue a fresh one in accordance with law, with any such fresh notice and process to be communicated to the petitioner's specified email and mobile number, and a reply to be filed by the petitioner if a fresh notice is issued.

Important Clarification

  • A GST registration cannot be cancelled with retrospective effect unless the underlying show cause notice itself expressly proposed or put the assessee to notice of retrospective cancellation - an order exceeding the notice's scope on this point is contrary to law and liable to be set aside, regardless of whether a reply was filed.
  • Setting aside such an order does not bar the department from issuing a fresh, properly-framed show cause notice (including one that does propose retrospective effect, if justified) and proceeding afresh.

Sections Involved

  • Section 29, CGST Act, 2017 - cancellation of registration, including retrospective cancellation.
  • Section 75(4), CGST Act, 2017 - opportunity of hearing before an adverse order, implicit in requiring the notice to match the order's scope.

Decision – In Favour of

Decided in favour of the assessee; retrospective cancellation order set aside, department at liberty to issue fresh notice.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case No.: W.P.(C) 16183/2025
  • Coram: Justice Prathiba M. Singh and Justice Madhu Jain
  • Date: 7th November, 2025

Link to Download the Order

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