M/S Modi Packers (Through Its Sole Proprietor, Sh. Mohit Modi) vs. Superintendent, Ward 63 (Range - 43) & Ors.

Held

The Court held that the retrospective cancellation of GST registration, which was not contemplated in the show cause notice, could not be given effect by the impugned order. The Court relied on its previous decisions in 'Subhana Fashion v. Commissioner Delhi Goods and Service Tax', 'M/S Balaji Industries v. The Principal Commissioner CGST Delhi North Commissionerate & Anr.', and 'Ridhi Sidhi Enterprises v. Commissioner of Goods & Service Tax (CGST), South Delhi & Anr.'. The Court found the cancellation order dated May 27, 2023, to be unsustainable as it was silent on the reasons for retrospective cancellation and did not address the Petitioner's contentions. Consequently, the impugned cancellation order was set aside, and the Petitioner's GST registration was restored. The Petitioner was directed to file all up-to-date returns with late fees and penalties by January 15, 2026. The Department was permitted to take action for any other violations. The Court did not expressly leave any issue undecided.

Facts

The Petitioner, M/s Modi Packers, challenged an order-in-appeal dated June 9, 2025, which dismissed their appeal against an order-in-original dated May 27, 2023. The original order had retrospectively cancelled the Petitioner's GST registration, effective from July 1, 2017. The appeal was dismissed solely on the grounds of limitation. The Petitioner had received a show cause notice on April 5, 2023, for cancellation of registration due to fraud. The Petitioner replied on April 12, 2023, providing an updated address. The cancellation order was passed without considering the Petitioner's reply or conducting an inspection at the new address. The Petitioner argued that the cancellation was retrospective and not contemplated in the show cause notice.

Key Issues

1. Whether the retrospective cancellation of GST registration, not contemplated in the show cause notice, is valid under the GST Act? 2. Whether the appellate authority erred in dismissing the appeal on grounds of limitation when the core issue was the validity of the retrospective cancellation order? The Petitioner argued that the retrospective cancellation of GST registration was impermissible as it was not mentioned in the show cause notice dated April 5, 2023. They contended that the cancellation order dated May 27, 2023, failed to address the averments in their reply and that the retrospective nature was an afterthought. The Petitioner also highlighted that their GST registration certificate was amended with a new address on March 28, 2023, but the inspection was conducted at the old address. The Petitioner expressed willingness to file pending returns and pay late fees/penalties. The Respondent conceded that retrospective cancellation was not contemplated in the show cause notice and acknowledged a lapse in passing the reasoned order.