SCN u/s 29 CGST Act must reflect Reasons and Intent of Retrospective Cancellation of Registration: Delhi HC [Read Order]
It was decided that the order issued under Section 29(2) had to take into account the factors that might have influenced the respondents' decision to terminate their registration with retroactive effect
![SCN u/s 29 CGST Act must reflect Reasons and Intent of Retrospective Cancellation of Registration: Delhi HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/GST-Registration-Cancellation.jpg "SCN u/s 29 CGST Act must reflect Reasons and Intent of Retrospective Cancellation of Registration: Delhi HC [Read Order]")
The Delhi High Court has been made clear that a decision to cancel a trader's GST registration with retroactive effect will not be upheld unless the authority's intentions and the reasons for the cancellation are reflected in the show cause notice. Read More: President appoints New Supreme Court Judge and 3 Judges in J&K and Ladakh High Court The Limited Liability Partnership...
The Delhi High Court has been made clear that a decision to cancel a trader's GST registration with retroactive effect will not be upheld unless the authority's intentions and the reasons for the cancellation are reflected in the show cause notice.
Read More: President appoints New Supreme Court Judge and 3 Judges in J&K and Ladakh High Court
The Limited Liability Partnership whose GST registration was revoked under Section 29 of the Central Goods and Service Tax Act, 2017 with retroactive effect from November 9, 2017, was the subject of the matter before the court. The Petitioner went to the High Court in its writ jurisdiction after the Additional Commissioner of GST dismissed its appeal.
The High Court stated right away that neither the SCN nor the final ruling mentioned any information that would have led the authority to conclude that Section 29(2)(e) of the GST Act had been broken. If a GST registration was obtained through fraud, deliberate misrepresentation, or factual suppression, the clause allows for its termination. The proposed retroactive termination of the petitioner's GST registration was not even expressed in the filings.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed that in the absence of reasons having been assigned in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action.
The bench cited Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. (2024) where a coordinate bench of the High Court had held that mere conferral of power to cancel GST registration with retrospective effect under Section 29 of the Goods and Services Tax Act 2017 would not justify a revocation.
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It was decided that the order issued under Section 29(2) had to take into account the factors that might have influenced the respondents' decision to terminate their registration with retroactive effect. It is even more important that the order be logical and show that sufficient consideration was given to the negative effects that would follow and accompany a retroactive cancelation.
As a result, the Department was given permission to continue against the Petitioner only after being fully informed of the facts supporting that opinion in accordance with Section 29(2)(e).
To Read the full text of the Order CLICK HERE
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