Company Not Found During GST Anti-Evasion Visit, Absence Due to Family Bereavement: Delhi HC Directs Re-Inspection [Read Order]
Delhi HC Sets Aside Retrospective GST Cancellation After Company Explains Absence During Anti-Evasion Visit Was Due to Family Bereavement, Orders Fresh Inspection and Hearing
In a recent decision, the Delhi High Court dealt with a case where a company was not found at its registered premises during a GST Anti-Evasion visit, and the taxpayer explained that the absence occurred because the concerned persons were away due to a family bereavement. The court directed the department to conduct a fresh inspection before taking any further steps.
Stalwart India Alloys Limited filed a writ petition challenging the cancellation order dated 26 September 2025, by which the Superintendent, CGST Delhi North, cancelled the company’s GST registration retrospectively from 20 February 2024. The cancellation was based on a show-cause notice issued on 27 December 2024, alleging that during an Anti-Evasion inspection on 20 December 2024, the company was not found at its registered premises.
The petitioner submitted a reply on January 4, 2025, and explained that the company was unable to be present during the inspection due to a family bereavement. The petitioner also requested that the premises be re-inspected.
The grievance raised was that the personal hearing was scheduled on 2 January 2025, even before the reply was due, and that the reply and the request for re-inspection were not considered before cancelling the GST registration retrospectively.
The petitioner’s counsel argued that retrospective cancellation cannot be ordered unless the show cause notice itself proposes such cancellation. They submitted that this legal position has already been affirmed in earlier decisions of the Delhi High Court.
On the other hand, the GST Department‘s counsel submitted that the petitioner was given a personal hearing but chose not to appear. They further argued that the petitioner had also been evading the ongoing investigation by the Anti-Evasion Branch, CGST Delhi North.
A Division Bench of Justice Prathiba M. Singhand Justice Madhu Jain heard the matter. After considering the submissions, the Court observed that two aspects required attention. First, the petitioner must cooperate in the investigation.
The court recorded the undertaking of the petitioner’s Director, Mr. Shantanu Jawala, that he would cooperate with the Anti-Evasion Branch. Second, the Court directed that the GST Department conduct a fresh inspection of the registered premises after giving prior notice to the petitioner.
The court explained that retrospective cancellation of GST registration is not permissible unless the show cause notice itself contemplates such cancellation. It pointed out that this principle has been repeatedly affirmed in earlier decisions of the Court.
In view of these findings, the court set aside the retrospective cancellation of the GST registration and directed the authorities to grant a fresh hearing after re-inspecting the premises.
The petitioner was permitted to file a detailed reply to the show cause notice. A fresh order is to be passed thereafter in accordance with law. All rights and remedies of the parties were left open, and the writ petition was disposed of.
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