Facts of the Case

The petitioner, RHA Enterprises, had applied for cancellation of its GST registration on 18.04.2023, which was rejected without reasons on 12.06.2023. A system-generated show cause notice was subsequently issued on 13.11.2023 – after the petitioner had already sought cancellation – alleging non-filing of returns, and no reply was filed by the petitioner. The registration was then cancelled retrospectively with effect from 04.09.2017 by order dated 19.01.2024. The petitioner challenged the retrospective cancellation before the Delhi High Court. During the hearing, the Court also directed the Department to verify whether any Section 73/74 notice was pending against the petitioner or whether its GSTIN featured in any third-party notice; the Department confirmed there was none, though the petitioner conceded that demands in two other writ petitions concerning it had been separately remanded.

Issues Involved

  1. Whether a GST registration can be cancelled with retrospective effect where the show cause notice preceding the cancellation did not propose or contemplate any retrospective date.
  2. From which date should the cancellation take effect in such circumstances.

Petitioner's Arguments

  • No reasons were given in the order rejecting the petitioner's own cancellation application dated 18.04.2023.
  • The show cause notice dated 13.11.2023, issued only on the ground of non-filing of returns, did not contemplate retrospective cancellation, yet the final order cancelled registration retrospectively from 04.09.2017.

Respondent's Arguments

  • The Department, upon the Court's query, verified and confirmed that no other Section 73/74 show cause notice was pending against the petitioner, nor did its GSTIN appear in any third-party notice.

Court Order / Findings

  • The Court found that the sole ground in the show cause notice was non-filing of returns, with no reply filed, following which the cancellation order was passed – but made retrospective without any contemplation of retrospectivity in the SCN.
  • Relying on its own precedent in Garg Candle Works v. Commissioner, Delhi GST [(2025 SCC OnLine Del 3942)], the Court set aside the retrospective element of the cancellation.
  • The Court directed that the cancellation shall take effect only from the date of issuance of the show cause notice, i.e., 13.11.2023, rather than from 04.09.2017.

Important Clarification

  • A GST registration cancellation order cannot operate retrospectively beyond the date of the show cause notice where that notice did not propose or put the taxpayer on notice of any retrospective cancellation; in such cases, the cancellation is read down to take effect only from the date of the SCN.

Sections Involved

  • Section 29, CGST Act, 2017 – cancellation of registration, including retrospective cancellation.
  • Section 73 & 74, CGST Act, 2017 – referenced in the Court's inquiry into whether any other demand proceedings were pending against the petitioner.

Decision – In Favour of

Disposed of in favour of the Assessee; the retrospective element of the cancellation was set aside, with cancellation to operate only from the date of the show cause notice.

Case Details

High Court of Delhi at New Delhi; W.P.(C) 5825/2025; Coram: Justice Prathiba M. Singh and Justice Shail Jain; Order dated 06.08.2025.

Link to Download the Order

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