GST Registration Cannot Be Cancelled Retrospectively Unless Specifically Mentioned in SCN: Andhra Pradesh HC [Read Order]
The Andhra Pradesh High Court ruled that GST registration cannot be cancelled retrospectively unless the show cause notice clearly proposes such action.
GST Registration
GST Registration
In a recent ruling, the Andhra Pradesh High Court held that GST registration cannot be cancelled retrospectively unless the show cause notice specifically mentions such action.
R K I Builders Private Limited, the petitioner, is engaged in works contract services and had registered under GST in July 2018. Later, the company underwent a corporate insolvency resolution process and new management took over under orders of the NCLT in January 2025. Due to disruptions during this process, the company failed to file GST returns from February 2025 onwards.
The Superintendent of Central Taxes issued a show cause notice on 22 May 2025 proposing cancellation of registration on the ground that the company was not conducting business at its declared address. The petitioner’s registration was then cancelled by order dated 15 June 2025, with retrospective effect from 1 July 2017.
The petitioner’s counsel argued that the cancellation order was invalid as it went beyond the scope of the show cause notice. They pointed out that the notice only proposed cancellation but did not mention retrospective effect, and cancelling registration from 2017 without prior mention was a violation of natural justice.
The respondents’ counsel argued that cancellation was justified because the petitioner was no longer operating from its declared business address. They explained that under GST law, it is mandatory for a registered person to carry on business at the address provided to the authorities.
The Division Bench comprising Justice R.Raghunandan Rao and Justice T.C.D. Sekhar observed that the purpose of a show-cause notice is to inform the noticee of the proposed action and give an opportunity to respond. Any action taken must remain within the limits of the notice.
The court observed that since the show cause notice did not mention retrospective effect, the order cancelling registration from 1 July 2017 violated the principles of natural justice.
The court set aside the cancellation order dated 15 June 2025 and remanded the matter to the Superintendent of Central Taxes to pass a fresh order after giving the petitioner a proper hearing and clearly stating the proposed action. The writ petition was allowed with no order as to costs.
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