Vague SCN Invalidates Retrospective GST Cancellation

Case Details: Bansal Casting vs. Union of India [2026] 185 taxmann.com 29 (Punjab & Haryana)

Judiciary and Counsel Details

Mrs Lisa Gill & Ramesh Chander Dimri, JJ.
Ms Radhika Suri, Sr. Adv., Ms Parnika Singla, Abhinav Narang, J.S. Bedi & Aman Garg, Advs. for the Petitioner.
Saurabh Kapoor, R.S. Pandher, Addl. A.Gs., Ms Mamta Singla Talwar, DAG, Sourabh Goel & Ajay Kalra, Sr. Standing Counsels for the Respondent.

Facts of the Case

The petitioners were issued show cause notices in Form GST REG-17 on generic grounds without proposing retrospective cancellation or furnishing documents relied upon. Subsequently, the jurisdictional officer under CGST passed cryptic, non-speaking cancellation orders with retrospective effect, without disclosing the basis, and, in certain cases, even from a prior date or after the application for voluntary cancellation. Aggrieved, the petitioners filed writ petitions challenging the validity of such notices and orders on grounds of violation of principles of natural justice and lack of proper reasoning. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that retrospective cancellation under Section 29 of the CGST Act and Haryana GST Act, read with Rule 22 of the CGST Rules and Haryana GST Rules, requires due process, including proper notice and recorded reasons. It was observed that the absence of a proposal for retrospective cancellation and the non-supply of relied-upon documents denied an effective opportunity of defence. The Court held that cryptic, non-speaking and mechanical orders reflected non-application of mind and were unsustainable, and such defects could not be cured by post facto justifications. Accordingly, the impugned notices and orders were set aside to the extent of retrospective effect, with liberty to initiate fresh proceedings in accordance with law.

List of Cases Referred to

Ajay Gupta v. Sales Tax Officer [2025] 179 taxmann.com 18 (Delhi) (para 6)
Pooja Enterprises v. Sales Tax Officer Class II Avato [2025] 177 taxmann.com 765/111 GST 645 (Delhi) (para 6)
Eworld Business Solutions (P.) Ltd. v. Superintendent, Range 94 Central GST [2025] 178 taxmann.com 236/102 GSTL 115 (Delhi) (para 6)
Sunrise India v. Commissioner, Delhi GST [2024] 162 taxmann.com 378/104 GST 719/87 GSTL 484 (Delhi) (para 6)
JSD Traders LLP v. Additional Commissioner, CGST [2025] 172 taxmann.com 551/97 GSTL 160 (Delhi) (para 6)
Ravi Parkash Goel v. Sales Tax Officer, AVATO [2024] 162 taxmann.com 840 (Delhi) (para 6)
Akash Bansal v. Superintendent, Central GST Department, Delhi West [2025] 177 taxmann.com 518 (Delhi) (para 6)
V R Impex v. Commissioner of Delhi GST [2025] 177 taxmann.com 492 (Delhi) (para 6)
Oryx Fisheries (P.) Ltd. v. UOI (2010) 13 SCC 427 (para 13)
Riddhi Siddhi Enterprises v. Commissioner of GST (CGST) [2024] 167 taxmann.com 302/90 GSTL 257 (Delhi) (para 15)
Godrej Sara Lee Ltd. v. Excise and Taxation Officer-Cum-Assessing Authority 2023 AIR SC 781 (para 21).