M/s North Steel India v. Union of India & Ors.

CORAM : HON’BLE MR. JUSTICE DEEPAK SIBAL HON’BLE MR. JUSTICE DEEPAK SIBAL HON’BLE MS. JUSTICE LAPITA BANERJI HON’BLE MS. JUSTICE LAPITA BANERJI HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Ish Puneet Singh, Advocate, Mr. Ish Puneet Singh, Advocate, for the petitioner. for the petitioner. Mr. Rishabh Kapoor, Advocate, Mr. Rishabh Kapoor, Advocate, for respondents No.1 to 4. for respondents Mr. Saurabh Kapoor, Additional A.G., Punjab and Mr. Saurabh Kapoor, Additional A.G., Punjab Mr. Saurabh Kapoor, Additional A.G., Punjab Ms. Muskaan Gupta, Advocate, Ms. Muskaan Gupta, Advocate, for respondents No.5 to 8. for respondents No.5 to 8. DEEPAK SIBAL, J. (Oral) DEEPAK SIBAL *** Learned counsel for the petitioner restricts his claim to the Learned counsel for the petitioner restricts his claim to the Learned counsel for the petitioner restricts his claim to the dated 05.01.2026 served upon the challenge to the show cause notice dated 05.01.2026 served upon the challenge to the show cause notice cancellation of its GST registration. petitioner with regard to cancellation of its GST registration. petitioner with regard to

2. The impugned show cause notice dated 05.01.2026 reads as The impugned show cause notice dated 05.01.2026 reads as The impugned show cause notice dated 05.01.2026 reads as under:- FORM GST REG-17 “FORM GST REG [See Rule 22(1)] [See Rule 22(1)] Reference No.: ZA030126007296Z Date:05/01/2026 Reference No.: ZA030126007296Z Reference No.: ZA030126007296Z To To Registration Number (GSTIN/UIN): 03CAEPG7493M1ZD Registration Number (GSTIN/UIN): 03CAEPG7493M1ZD Registration Number (GSTIN/UIN): 03CAEPG7493M1ZD GOLDY GOLDY GODOWN NO 171, GROUND FLOOR, NORTH STEEL GODOWN NO-171, GROUND FLOOR, NORTH STEEL INDIA, NEAR CANAL, AMLOH ROAD, OPP DOABA MILL, INDIA, NEAR CANAL, AMLOH ROAD, OPP DOABA MILL, INDIA, NEAR CANAL, AMLOH ROAD, OPP DOABA MILL, DASHMESH COLONY, Mandi Govindgarh, Fatehgarh Sahib, DASHMESH COLONY, Mandi Govindgarh, Fatehgarh Sahib, DASHMESH COLONY, Mandi Govindgarh, Fatehgarh Sahib, Punjab, 147301 Punjab, 147301 Show Cause Notice for Cancellation of Registration Show Cause Notice for Can VANDANA 2026.05.06 09:36 I attest to the accuracy and integrity of this document CWP-8881-2026 2026 (O&M) Whereas on the basis of information which has come to my Whereas on the basis of information which has come to my Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be notice, it appears that your registration is liable to be notice, it appears that your registration is liable to be cancelled for the following reasons: cancelled for the following reasons: cancelled for the following reasons: registration obtained by means of fraud, 1. Section 29(2)(e)-registration obtained by means of fraud, 1. Section 29(2)(e) nt or suppression of facts wilful misstatement or suppression of facts wilful misstateme Person does not conduct any business from 2. Rule 21 (a) - Person does not conduct any business from 2. Rule 21 (a) declared place of business/place of business not found declared place of business/place of business not found declared place of business/place of business not found person issues invoice or bill without supply of 3. Rule 21(b)- person issues invoice or bill without supply of 3. Rule 21(b) goods or services or both in violation of the provisions of the goods or services or both in violation of the provis goods or services or both in violation of the provis Act, or the rules made thereunder Act, or the rules made thereunder Act, or the rules made thereunder person avails ITC in violation of the provisions 4. Rule 21(e)-person avails ITC in violation of the provisions 4. Rule 21(e) of section 16 of the Act or the rules made thereunder of section 16 of the Act or the rules made thereunder of section 16 of the Act or the rules made thereunder person violates the provision of rule 86B 5. Rule 21(g)-person violates the provision of rule 86B 5. Rule 21(g)

6. Others 6. Others Remarks: Remarks: existent during PV conducted by SGST The firm was found non-existent during PV conducted by SGST The firm was found authorities and they have requested to initiate cancellation authorities and they have requested to initiate cancellation authorities and they have requested to initiate cancellation proceedings of the GSTN. It appears that the registration was proceedings of the GSTN. It appears that the registration was proceedings of the GSTN. It appears that the registration was obtained by means of fraud, wilful misstatement or suppression obtained by means of fraud, wilful misstatement or suppression obtained by means of fraud, wilful misstatement or suppression ny of the records available on the of facts. Further, on scrutiny of the records available on the of facts. Further, on scruti GST portal, it was found that the major suppliers of the firm GST portal, it was found that the major suppliers of the firm GST portal, it was found that the major suppliers of the firm moto from date of registration for has been cancelled suo-moto from date of registration for has been cancelled suo passing fake ITC. It appears that the your firm has been passing fake ITC. It appears that the your firm has been passing fake ITC. It appears that the your firm has been operating on papers only and had also been engaged in operating on papers only and had also been e operating on papers only and had also been e availing & passing of fake ITC without actual movement of availing & passing of fake ITC without actual movement of availing & passing of fake ITC without actual movement of goods in contravention to the CGST Act, 2017, hence, your goods in contravention to the CGST Act, 2017, hence, your goods in contravention to the CGST Act, 2017, hence, your GST no. is liable for cancellation with retrospective effect i.e. GST no. is liable for cancellation with retrospective effect i.e. GST no. is liable for cancellation with retrospective effect i.e. from the date of registration. It is, therefore, requested to from the date of registration. It is, therefore, requested to from the date of registration. It is, therefore, requested to bmit your reply in r/o above charges within due date and submit your reply in r/o above charges within due date and attend the personal hearing with relevant records, if any, attend the personal hearing with relevant records, if any, attend the personal hearing with relevant records, if any, which you want to produce in your defence. Otherwise, your which you want to produce in your defence. Otherwise, your which you want to produce in your defence. Otherwise, your GST No. will be cancelled retrospectively & GST No. will be cancelled retrospectively & GST No. will be cancelled retrospectively & further further further against you under the CGST Act, proceedings will be initiated against you under the CGST Act, proceedings will be initiated 2017 to recover the government dues. 2017 to recover the government dues. 2017 to recover the government dues. VANDANA 2026.05.06 09:36 I attest to the accuracy and integrity of this document CWP-8881-2026 2026 (O&M) You are hereby directed to furnish a reply to the notice within You are hereby directed to furnish a reply to the notice within You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice. seven working days from the date of service of this notice. seven working days from the date of service of this notice. You are hereby directed to appear before the undersigned You are hereby directed to appear before the undersigned You are hereby directed to appear before the undersigned rity on 14/01/2026 at 10:30. authority on 14/01/2026 at 10:30. If you fail to furnish a reply within the stipulated date or fail to If you fail to furnish a reply within the stipulated date or fail to If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, appear for personal hearing on the appointed date and time, appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available the case will be decided ex parte on the basis of available the case will be decided ex parte on the basis of available records and on merits. records and on merits. t your registration stands suspended with effect Please note that your registration stands suspended with effect Please note tha from 23/08/2024. from 23/08/2024. Kindly refer the supportive document attached for case specific Kindly refer the supportive document attached for case specific Kindly refer the supportive document attached for case specific details. details. Place: CBIC Place: CBIC Date: 05.01.2026 Date: 05.01.2026 Ashish Kumar Singh Superintendent Range-IV”

3. A perusal of the afore quoted show cause notice reveals that A perusal of the afore quoted show cause notice reveals that A perusal of the afore quoted show cause notice reveals that the same is based on physical verification conducted by the State authorities the same is based on physical verification conducted by the State authorities the same is based on physical verification conducted by the State authorities as per which the petitioner-firm was not found to exist. as per which the petitioner firm was not found to exist. Further, on scrutiny of the records available on the GST por records available on the GST portal it had been found that GST registration of the petitioner’s major suppliers having been cancelled registration of the petitioner’s major suppliers having been cancelled with he petitioner had been operating on paper only retrospective effect and that the petitioner had been operating on paper only retrospective effect as also that it had been availing/passing on fake I as also that it h sing on fake Input Tax Credit without actual movement of goods. actual movement of goods.

4. In support of the afore basis, no physical verification report In support of the afore basis, physical verification report has o details with regard to cancellation of been supplied to the petitioner. No details with regard to cancellation of been supplied to the petitioner. GST registration of any of its major suppliers GST registration major suppliers has also been furnished. as to how the petitioner is availing/passing on fake Input Tax Credit as to how the petitioner is availing/passing on fake I Details as to how the petitioner is availing/passing on fake I without actual movement of goods are also missing. without actual movement of good missing. Though it is mentioned in the impugned impugned show cause notice that for specific details for specific details supportive VANDANA 2026.05.06 09:36 I attest to the accuracy and integrity of this document CWP-8881-2026 2026 (O&M) documents are are attached but admittedly, no such supportive such supportive documents were along with the impugned show cause notice served upon the appended along with the impugned show cause notice served upon the along with the impugned show cause notice served upon the petitioner.

5. In the light of the above, the impugned show cause notice In the light of the above, the impugned show cause notice In the light of the above, the impugned show cause notice dated 05.01.2026 is violative of the principles of natural justice and dated 05.01.2026 is violative of the principles of natural justice and does not serve the purpose behind it . It is also against the spirit of Rule serve the purpose behind its issuance. It is also against the spirit of Rule 22 of the Central entral Goods and Services Tax Rules 2017 Rules 2017. Therefore, we set show cause notice dated 05.01.2026 (Annexure P-2) with liberty show cause notice dated 05.01.2026 (Annexure P aside the show cause notice dated 05.01.2026 (Annexure P against the petitioner in accordance to the respondents to proceed afresh against the petitioner in accordance to the respondents to proceed with law.

6. The petition is allowed in the above terms. The petition is allowed in the above terms. The petition is allowed in the above terms. (DEEPAK SIBAL DEEPAK SIBAL) JUDGE JUDGE (LAPITA BANERJI) (LAPITA BANERJI) JUDGE JUDGE , 2026 April 30, 2026 vandana Whether speaking/reasoned : ther speaking/reasoned : Whether reportable : Whether reportable Yes/No Yes/No VANDANA 2026.05.06 09:36 I attest to the accuracy and integrity of this document