Facts of the Case:

In this case, the petitioner was engaged in the trading of iron and steel materials and registered under the CGST Act, 2017, challenged the order dated 19.01.2024 whereby its GST registration was cancelled with retrospective effect from 17.10.2023. The show cause notice dated 08.01.2024 merely stated that discrepancies were noticed during physical verification of the premises. The petitioner contended that the notice was never served and that no physical verification was conducted in accordance with the statutory provisions. Further, no verification report in Form GST REG-30 or supporting documents were provided. Despite this, the authority cancelled the registration with retrospective effect through a cryptic and non-speaking order without providing reasons or referring to any supporting material.

Issue:

Whether GST registration can be cancelled with retrospective effect when such action was not proposed in the show cause notice. Whether a non-speaking cancellation order without reasons or supporting documents is legally sustainable.

Held that:

The Court held that although Section 29 of the CGST Act, 2017 empowers authorities to cancel registration with retrospective effect, such power must be exercised only after putting the taxpayer to notice and recording proper reasons. In the present case, the show cause notice did not contain any proposal for retrospective cancellation, nor were the supporting documents relied upon by the authorities supplied to the petitioner. The cancellation order merely referred to the show cause notice and stated that registration stood cancelled from 17.10.2023, without any reasoning or analysis.

The Court observed that cancellation of GST registration with retrospective effect has serious civil consequences, and therefore such orders must reflect due application of mind and proper reasoning. A non-speaking order passed without providing the taxpayer an opportunity to respond to the proposed action violates principles of natural justice.

The Court relied on its earlier judgment in M/s Bansal Casting v. Union of India, the Court reiterated that retrospective cancellation cannot be applied mechanically and must be specifically proposed in the show cause notice. Accordingly, the cancellation order dated 19.01.2024 was set aside.

Case Name: M/s. Jordan Enterprises Versus Union of India and others. dated 25.02.2026

To read the complete judgement 2026 Taxo.online 572