Facts of the Case

The petitioner, R S Enterprises, was issued a show cause notice on 01.08.2021 alleging fraud, wilful mis-statement and suppression of facts as grounds for cancellation of its GST registration. The order for cancellation was passed on 19.07.2022, cancelling the registration retrospectively from 01.07.2017, and recorded that a reply dated 07.01.2022 had been filed. However, the petitioner had no copy of any such reply, which was also not traceable with the GST Network (GSTN). On the Delhi High Court's direction dated 01.04.2024 to the Managing Director, GSTN to extract the reply, GSTN filed an affidavit confirming that no reply was filed on 07.01.2022, and that the petitioner had not even logged into its account on that date. The petitioner's subsequent appeal was dismissed as time-barred by order dated 22.12.2023.

Issues Involved

  1. Whether a GST registration cancellation order that refers to a reply which, per GSTN's own record, was never filed, can be sustained.
  2. Whether the cancellation could validly operate retrospectively from 01.07.2017 where the show cause notice did not contemplate retrospective cancellation.

Petitioner's Arguments

  • No reply was ever filed by the petitioner, contrary to what the cancellation order recorded, and this needed independent verification from GSTN's own records.

Respondent's Arguments

  • No specific submissions are recorded for the respondents; none appeared for the petitioner either at the final hearing, and the Court proceeded on the record including GSTN's affidavit.

Court Order / Findings

  • GSTN's affidavit confirmed that no reply was filed on 07.01.2022 and that the petitioner had not even logged into its account on that date, rendering the cancellation order's reference to a reply incorrect.
  • The Court found that the SCN did not contemplate retrospective cancellation, contrary to law laid down in Riddhi Siddhi Enterprises, Akash Bansal, and M/s Balaji Industries, and that the order was 'completely unreasoned', with no explanation as to why the registration was held to be obtained by fraud, mis-statement or suppression.
  • Both the SCN and the impugned cancellation order were set aside, with liberty to the Department to proceed afresh in accordance with law, with proper reasons, if there is any irregularity or non-compliance by the petitioner.

Important Clarification

  • Where a GST registration cancellation order for alleged fraud records a reply that GSTN's own affidavit confirms was never filed, and the order gives no reasons for the fraud/suppression finding, both the SCN and the cancellation order are liable to be set aside for being unreasoned and factually incorrect, independent of the retrospective-cancellation defect.

Sections Involved

  • Section 29(2), CGST Act, 2017 – cancellation of registration on grounds including fraud, wilful mis-statement or suppression of facts.
  • Section 107, CGST Act, 2017 – statutory appeal, dismissed on limitation in this case.

Decision – In Favour of

Disposed of in favour of the Assessee; both the show cause notice and the cancellation order were set aside, with liberty to the Department to proceed afresh with proper reasons if warranted.

Case Details

High Court of Delhi at New Delhi; W.P.(C) 1669/2024; Coram: Justice Prathiba M. Singh and Justice Shail Jain; Order dated 15.12.2025.

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