Facts of the Case

Petro Chemical Mercantile Private Limited, registered at Byrnihat, Ri-Bhoi, Meghalaya, was issued a show-cause notice dated 22-05-2026 by the Superintendent of Taxes, Ri-Bhoi Circle, proposing to cancel its GST registration under Section 29(2)(e) of the Meghalaya GST Act, 2017, on the allegation that no manufacturing or production activity was carried out from its declared principal place of business and that it had issued tax invoices passing on Input Tax Credit without corresponding actual supply of goods or services. Its registration was suspended with effect from the same date. The petitioner filed a detailed reply on 25-05-2026 denying the allegations and furnishing statutory and commercial records, but the authorities had not decided on it by the time the writ petition was filed before the Meghalaya High Court.

Issues Involved

  1. Whether continued inaction on a timely-filed reply to a registration-cancellation show-cause notice, with the resulting suspension persisting indefinitely, warrants judicial intervention.
  2. What relief is appropriate without pre-judging the merits of the underlying cancellation allegations.

Petitioner's Arguments

  • The show-cause notice's premise — that absence of manufacturing activity at the registered place shows no genuine business — was erroneous.
  • The allegation of passing on Input Tax Credit without corresponding supply was denied, with all relevant statutory and commercial records already furnished.
  • The sole relief pressed was a direction for the authorities to decide the pending reply, given the severe impact of continued suspension on business operations.

Respondent's Arguments

  • The Government Advocate appeared and participated in the hearing on the limited prayer pressed by the petitioner, without separately contesting the request for a time-bound decision.

Court Order / Findings

  • On the limited prayer made, and without examining the merits of the cancellation allegations, the Court directed the respondent authorities to consider and decide the petitioner's pending reply expeditiously, preferably within three weeks from the date of the order.
  • The writ petition was accordingly disposed of and closed, leaving the substantive cancellation dispute to be decided by the department itself.

Important Clarification

  • Courts will not always adjudicate the merits of a registration-cancellation allegation on a first writ petition, but will step in to compel a time-bound decision where the department sits on a taxpayer's timely reply.
  • Prolonged suspension of GST registration has an immediate operational impact on business, which by itself justifies limited judicial intervention even without deciding the underlying dispute.

Sections Involved

  • Section 29(2)(e), Meghalaya GST Act, 2017 — permits cancellation of registration where a taxpayer avails Input Tax Credit in contravention of the Act or issues invoices without actual supply of goods or services.
  • Section 29(2), CGST Act, 2017 — the corresponding general power of cancellation for such contraventions under the parallel central provision.

Decision – In Favour of

Disposed of with directions; no decision on the merits of the cancellation allegations for either side. The petitioner secured only a time-bound procedural direction for the department to decide its pending reply within three weeks.

Case Details

Court: High Court of Meghalaya at Shillong
Case No.: WP(C) No. 369 of 2026
Coram: Hon'ble Mr. Justice H.S. Thangkhiew and Hon'ble Mr. Justice B. Bhattacharjee
Date of Order: 18.08.2026

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