Facts of the Case

Shubham Singh, proprietor of R.H. Enterprises registered under the GST Act since 13.07.2021, had faced repeated cycles of show cause notices and cancellation orders concerning his registration. An earlier cancellation dated 04.04.2024 was set aside by the High Court in Writ Tax No.141 of 2024, following which registration was restored on 06.06.2024. A fresh cancellation order dated 21.04.2025 was subsequently set aside in appeal on 28.05.2025, but the Department did not restore the firm on the portal, leading to another writ petition disposed of on 11.07.2025 on the Department's assurance of restoration. Soon after, a fresh show cause notice-cum-suspension order dated 12.08.2025 in FORM GST REG-17 was issued citing the same grounds under Rules 21(a), 21(b) and 21(e) of the U.P. GST Rules, prompting the present petition. The State disclosed that a DGGI investigation had found the firm's declared business premises to be a mere residence with no business activity, that one Dipanshu Srivastava (who admitted to generating forged input tax credit and was arrested by DGGI) was actually running the firm, and that the petitioner's supplier was also found to be non-existent; a Section 74(1) notice had reportedly been emailed to the petitioner on 25.08.2025.

Issues Involved

  1. Whether the repeated issuance of cancellation-cum-suspension notices without conclusion of adjudication under Sections 73/74 amounts to abuse of process.
  2. Whether cancellation of registration is permissible absent satisfaction of the specific conditions in Section 29(2) of the GST Act.
  3. Whether, given issuance of a Section 74(1) notice, the writ petition should be relegated to the statutory adjudication process.

Petitioner's Arguments

  • The respondents appear adamant on not allowing the petitioner to run his business, repeatedly issuing show cause notices and cancelling registration without valid reason.
  • No adjudication proceedings under Sections 73 or 74 have concluded against the petitioner alleging any violation, and cancellation of registration can only be resorted to when the conditions of Section 29(2) are attracted.
  • Service of the Section 74(1) notice, said to have been emailed on 25.08.2025, is denied.

Respondent's Arguments

  • Liberty was granted by the earlier writ and appellate orders to proceed afresh after furnishing supportive material of the irregularities.
  • A DGGI letter dated 30.10.2024 reported that the declared business premises was a residential house with no business activity, that Dipanshu Srivastava (later arrested) was actually operating the firm and had admitted to generating forged input tax credit, and that the petitioner's supplier, M/s A.K. Traders, was also non-existent.
  • A notice under Section 74(1) had accordingly been issued and, on instructions, presumed served on the petitioner's email.

Court Order / Findings

  • The Court took the Department's detailed instructions, including the Section 74(1) notice annexed thereto, on record.
  • Since a Section 74(1) notice had already been issued, the writ petition was disposed of with a direction to the petitioner to approach the appropriate authority with a detailed reply along with documentary evidence within two weeks, latest by 16.09.2025.

Important Clarification

  • Where the Department has moved from repeated cancellation notices to a formal Section 74(1) show cause notice backed by investigation material, the writ court will generally decline to adjudicate the underlying allegations and instead direct the taxpayer to respond within the statutory adjudication framework.
  • Cancellation of GST registration otherwise remains confined to the specific grounds under Section 29(2), and a pattern of repeated cancellation notices without a concluded Section 73/74 adjudication invites judicial scrutiny.

Sections Involved

  • Section 29(2), CGST/UP GST Act, 2017 — grounds for cancellation of registration.
  • Section 74(1), CGST/UP GST Act, 2017 — determination of tax involving fraud, wilful misstatement or suppression.
  • Rule 21, UP GST Rules, 2017 — grounds for cancellation; FORM GST REG-17 — show cause notice for cancellation-cum-suspension.

Decision – In Favour of

Disposed of with directions; petitioner directed to respond to the Section 74(1) notice, no finding on merits.

Case Details

High Court of Judicature at Allahabad, Lucknow Bench; Writ Tax No. 844 of 2025; Coram: Hon'ble Mrs. Sangeeta Chandra, J. and Hon'ble Brij Raj Singh, J.; Order dated 02.09.2025.

Link to Download the Order

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