Akash Bansal (Proprietor M/S Shri Prem Ji Traders) vs. Superintendent Range - 109 Central Goods And Services Tax Department, Delhi West, Division- Rohini

W.P.(C) 3492/2025 Page 1 of 10 $~14 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 13th August, 2025 + W.P.(C) 3492/2025 AKASH BANSAL (PROPRIETOR M/S SHRI PREM JI TRADERS) .....Petitioner Through: Mr. Nitin Gulati & Ms. Reena Gandhi, Advs. (9313133000) versus SUPERINTENDENT RANGE - 109 CENTRAL GOODS AND SERVICES TAX DEPARTMENT, DELHI WEST, DIVISION- ROHINI .....Respondent Through: Mr Aakarsh Srivastava, Senior Standing Counsel with Mr. Anand Pandey, Adv. (9871094948) CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN Prathiba M. Singh, J. (Oral) 1. This hearing has been done through hybrid mode. 2. This is a petition challenging the order dated 19th August, 2024 cancelling the GST registration of the Petitioner. The grievance of the Petitioner is that it has been cancelled with retrospective effect from 8th October, 2019. 3. Ld. Counsel for the Petitioner submits that the reason given is non- compliance of Rule 10A of the Central Goods and Services Rules, 2017. The said provision reads as under: “Rule 10A. Furnishing of Bank Account Details. - After a certificate of registration in FORM GST REG- 06 has been made available on the common portal and a Goods and Services Tax Identification Number has been assigned, the registered person, except those who Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 2 of 10 have been granted registration under Rule 12 or, as the case may be Rule 16, shall within a period of thirty days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1or using invoice furnishing facility, whichever is earlier, furnish information with respect to details of bank account on the common portal.” 4. As per the said provision, the bank details have to be furnished within 30 days from the date of GST registration and the Petitioner had received its GST registration on 8th October, 2019 with registration No. 07CEFPB4719A1Z3. Thus, it is the submission of the ld. Counsel for the Petitioner that in 2024 the Department could not have raised the said objection, belatedly after five years. 5. Ld. SSC for the Department, on the other hand, submits that the Show Cause Notice dated 6th August, 2024 (hereinafter, ‘SCN’) was the third SCN issued to the Petitioner in respect of cancellation of the GST Registration. The earlier two SCNs dated 20th December, 2023 and 14th May 2024 were not replied to by the Petitioner. Even the SCN dated 6th August, 2024 has not been replied to and therefore, the retrospective cancellation order has been passed. 6. On a specific query, ld. Counsel for the Petitioner submits that there is no notice issued to the Petitioner or any of its customers/ purchaser in respect of fraudulent availment or passing of Input Tax Credit. 7. The Court has heard the parties and perused the documents placed on records. The settled legal position is that if the SCN does not contemplate retrospective cancellation, the order cannot be passed directing retrospective cancellation. This position has been reiterated by this Court in various decisions including in ‘Subhana Fashion v. Commissioner Delhi Goods and Service Tax (W.P. (C) 12255/2024)’, “M/S Balaji Industries v. The Principal Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 3 of 10 Commissioner CGST Delhi North Commissionerate & Anr. (W.P.(C) 11913/2024)’ and ‘Ridhi Sidhi Enterprises v. Commissioner of Goods & Service Tax (CGST), South Delhi & Anr. (W.P.(C) 8061/2024)’. 8. The relevant portions of the decision in Subhana Fashion (supra) is as under: “10. It is apparent to note that non-payment of dues for a period of three months is not a prescribed ground for cancelling the petitioner’s GST registration. 11. It is also important to note that the impugned order sets out a tabular statement, which indicates that no amount has been determined as payable by the petitioner. The Central Tax, State Tax, Integrated Tax and Cess payable by the petitioner is reflected as, “0.0”. 12. Apart from the above, the impugned order has also been passed in violation of principles of natural justice. Although the SCN called upon the petitioner to appear for a personal hearing at the appointed date and time, no such date or time was indicated. Thus, in effect the petitioner was not afforded an opportunity to be heard. 13. In view of the above, we set aside the impugned order. The respondents are directed to restore the petitioner’s GST registration forthwith.” 9. The relevant part of the judgment in “M/s Balaji Industries (Vipin Kumar) (Supra) is as under: “8. It is apparent from the above that the reasons as set out in the impugned order were not the reasons as set out in the SCN. Further, the SCN also did not propose cancellation of the petitioner’s GST registration with retrospective effect from 11.09.2017. Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 4 of 10 9. The petitioner filed an appeal against the impugned order cancelling its registration. However, the same was rejected by the appellate authority by the order dated 14.05.2024 on the ground that the petitioner’s appeal was barred by limitation. 10. As noted above, the reason for which the petitioner’s GST registration was cancelled was not reflected in the SCN. Although, the petitioner claims that it did not receive the SCN, it is apparent that even if it had, the same provided it no opportunity to respond to the reasons as set out in the impugned order cancelling its GST registration. 11. As noted above, the petitioner is not aggrieved by the cancellation of its GST registration as it had closed down its business. The petitioner is, essentially, aggrieved by cancelling of its GST registration with retrospective effect. 12. The present petition was listed on 29.08.2024 and the learned counsel appearing for the respondents sought time to take instructions. 13. The learned counsel for the respondents states that the respondents have no objection if the cancellation of the petitioner’s GST registration is made operative with effect from the date of the SCN, that is, with effect from 24.05.2022. 14. In view of above, the present petition is disposed of with the direction that the petitioner’s GST registration stands cancelled with effect from 24.05.2022 (being the date on which it was suspended) and not with retrospective effect from 11.09.2017. 15. The impugned order is modified to the aforesaid extent.” 10. The relevant part of the judgment in ‘Riddhi Siddhi Enterprises (supra)’ is as under: “5. As is manifest from a reading of Section 29, Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 5 of 10 clauses (a) to (e) of Section 29(2) constitute independent limbs on the basis of which a registration may warrant cancellation. While the provision does enable the respondents to cancel that registration with retrospective effect, the mere existence or conferral of that power would not justify a revocation of registration. The order under Section 29(2) must itself reflect the reasons which may have weighed upon the respondents to cancel registration with retrospective effect. Given the deleterious consequences which would ensue and accompany a retroactive cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind. It is also necessary to observe that the mere existence of such a power would not in itself be sufficient to sustain its invocation. What we seek to emphasise is that the power to cancel retrospectively can neither be robotic nor routinely applied unless circumstances so warrant. When tested on the aforesaid precepts it becomes ex facie evident that the impugned order of cancellation cannot be sustained. 6. We note that while dealing with the right of the respondents to cancel GST registration with retrospective effect and the manner in which such power should be exercised in accordance with the statutory scheme was an issue which was noticed in Ramesh Chander vs Assistant Commissioner of Goods and Services Tax, Dwarka Division, CGST Delhi & Anr. The Court in Ramesh Chander taking note of the contours of Section 29 had held:- “1-5….. 6. Neither the show cause notice, nor the order spell out the reasons for retrospective cancellation. In fact, in our view, order dated Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 6 of 10 13.07.2022 does not qualify as an order of cancellation of registration. 7-8…… 9. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for someperiod does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. 10. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where Digitally Signed By:KESHAV Signing Date:14.08.2025 16:10:23 Signature Not Verified W.P.(C) 3492/2025 Page 7 of 10 such consequences are intended and are warranted. 11. The show cause notice does not even state that the registration is liable to be cancelled from a retrospective date. 12. The petition is allowed. The impugned show cause notice dated 07.04.2022,