Facts of the Case

Shatrughan Shaw's GST registration was cancelled with retrospective effect from February 5, 2022, pursuant to a proceeding initiated on a one-line show-cause notice dated May 10, 2021, despite the petitioner having himself earlier applied for voluntary cancellation since he had stopped carrying on the GST-attracting business — an application he claims was arbitrarily rejected before the retrospective-cancellation proceeding was initiated against him. His appeal under Section 107 of the WBGST/CGST Act, 2017 against the cancellation order was dismissed by the appellate authority, without considering the grounds raised, including vagueness of the show-cause notice and violation of natural justice. The petitioner explained his delay in approaching the High Court due to his own illness and the death of the consultant handling his case.

Issues Involved

  1. Whether retrospective cancellation of GST registration, initiated via a vague one-line show-cause notice, is sustainable in light of the Division Bench ruling in ED and F Man Commodities India Pvt. Ltd. vs. Assistant Commissioner State Tax.
  2. Whether an appellate order dismissing the appeal ex parte, without engaging with the specific grounds raised, can stand merely because the appellant failed to appear on the hearing dates.

Petitioner's Arguments

  • Retrospective cancellation could not have been undertaken on the basis of a vague one-line show-cause notice, per the binding Division Bench ruling in ED and F Man Commodities.
  • His own prior application for voluntary cancellation had been arbitrarily rejected before the fresh retrospective-cancellation proceeding was initiated against him, in derogation of natural justice.
  • His appeal, though rejected ex parte for non-appearance, raised these very grounds which the appellate authority never considered.

Respondent's Arguments

  • Represented by the State's counsel; the order records no specific rebuttal of the natural-justice and vagueness grounds beyond defending the ex parte dismissal as procedurally justified given the petitioner's non-appearance.

Court Order / Findings

  • The Court accepted that the appellate authority could not be faulted for proceeding ex parte given the petitioner's repeated non-appearance, but held that proceeding ex parte does not absolve a quasi-judicial appellate authority of its duty to apply its mind to the appeal grounds on record.
  • Since the impugned order merely confirmed the original authority's findings without dealing with the grounds raised by the petitioner, it could not be sustained.
  • The appellate order was set aside and the matter remanded to the appellate authority for fresh consideration, with a direction to hear the petitioner's appeal afresh and decide it on merits.

Important Clarification

  • Even when an appellant fails to appear and an appeal is rightly decided ex parte, the appellate authority under the GST Act remains obligated, as a quasi-judicial body, to examine and deal with the specific grounds raised in the appeal memorandum.
  • A mechanical order simply affirming the original authority's findings, without such engagement, will be set aside for non-application of mind, independent of whether the ex parte proceeding itself was justified.

Sections Involved

  • Section 29(2), CGST Act, 2017 — power to cancel GST registration, including with retrospective effect, for specified defaults.
  • Section 107, CGST Act, 2017 — first appellate remedy under which the ex parte order was passed.
  • Section 169, CGST Act, 2017 — modes of service of notice, relevant background to adequacy of the one-line show-cause notice.

Decision – In Favour of

The decision is in favour of the assessee. The appellate order was set aside and the matter remanded for fresh consideration on merits, with the underlying validity of the retrospective cancellation itself left to be decided afresh.

Case Details

Court: High Court at Calcutta
Case No.: WPA 21333 of 2025
Coram: Hon'ble Justice Om Narayan Rai
Date of Order: 19.11.2025

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