GST registration was already voluntarily cancelled from 24.01.2025, yet Department proposed retrospective cancellation from original registration date — Delhi High Court directed fresh consideration with hearing and reasoned order.

Issue:
Whether Department could proceed with retrospective cancellation of Assessee’s GST registration under Section 29(2)(e) on the ground of alleged “wilful misstatement or suppression of facts”, when the registration had already been cancelled on Assessee’s voluntary application, and whether Assessee’s reply was required to be considered before passing any adverse order.

Rule:
Under Section 29(2)(e) of the CGST Act, registration may be cancelled where it is alleged that registration was obtained by “wilful misstatement or suppression of facts”. However, when civil consequences follow, the Department is required to consider the Assessee’s reply, grant opportunity of hearing, and pass a reasoned order in accordance with law.

Application:
The Assessee had obtained GST registration with effect from 29.09.2023. Due to financial constraints and slowdown in business, the Assessee applied for voluntary cancellation on 24.01.2025. After calling for documents through Form GST REG-03, the Department cancelled the registration through Form GST REG-19 dated 31.01.2025, effective from 24.01.2025.
Thereafter, the Department issued Form GST REG-17 dated 12.12.2025, proposing retrospective cancellation from 29.09.2023 on the allegation that the Assessee was not found at the principal place of business and may have wrongly availed ITC. The Assessee replied that the registration had already been cancelled and no revocation application had been filed. The Court noted that the reply was still pending consideration.

Conclusion:
Since the Assessee’s registration had already been cancelled with effect from 24.01.2025 and the Assessee’s reply to the later show cause notice was yet to be adjudicated, the Delhi High Court directed the competent authority to examine the matter afresh, grant hearing, consider all documents and written submissions, and pass a reasoned order within two weeks.

IMPACT ANALYSIS
This judgment reinforces that even in retrospective GST registration cancellation proceedings, the Department cannot mechanically proceed without considering the Assessee’s reply. Proper hearing and a reasoned order remain essential where adverse civil consequences may arise.
Title: MARUTI ENTERPRISES vs. PRINCIPAL COMMISSIONER, DELHI G.S.T
Court: HIGH COURT OF DELHI
Citation:101 TLC(GST) 014
Dated: 04-05-2026
Provision: Under Section 29(2)(e)