CWP- 12072 v. Union of India

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. Mr. Rishab Singla, Advocate, for the petitioner. for the petitioner. Mr. Saurabh Kapoor, Additional A.G., Punjab. Mr. Saurabh Kapoor, Additional A.G., Punjab Mr. Saurabh Kapoor, Additional A.G., Punjab *** DEEPAK SIBAL, J. (Oral) DEEPAK SIBAL Through show cause notice dated 03.02.2026, the petitioner Through show cause notice dated 03.02.2026, the petitioner Through show cause notice dated 03.02.2026, the petitioner was put to notice as to why its GST registration be not cancelled to which was put to notice as to why its GST registration be not cancelled to which was put to notice as to why its GST registration be not cancelled to which the petitioner filed a written response along with supporting documents. the petitioner filed a written response along with supporting documents. the petitioner filed a written response along with supporting documents. Thereafter, Thereafter, ugh order dated 03.03.2026, through order dated 03.03.2026, the petitioner’s GST the petitioner’s GST registration has been cancelled which order has been challenged through the registration has been cancelled which order has been challenged through the registration has been cancelled which order has been challenged through the instant petition. instant petition.

2. Learned counsel for the petitioner submits that in response to Learned counsel for the petitioner submits that Learned counsel for the petitioner submits that the show cause notice dated 03.02.2026 the petitioner had filed a detailed the show cause notice dated 03.02.2026 the pet the show cause notice dated 03.02.2026 the pet written response along with necessary evidence which has been rejected written response along with necessary evidence which has been rejected written response along with necessary evidence which has been rejected through the impugned adjudication order by simply stating therein that the through the impugned adjudication order by simply stating therein that the through the impugned adjudication order by simply stating therein that the petitioner’s reply to the show cause notice has been examined. petitioner’s reply to the show cause notice has been examined petitioner’s reply to the show cause notice has been examined

3. Learned State counsel defends Learned State counsel the impugned adjudication order by simply stating that the petitioner’s reply filed to the show cause order by simply stating that the petitioner’s reply filed to the show cause order by simply stating that the petitioner’s reply filed to the show cause notice was duly considered and an opinion was formed by the P notice was duly considered and an opinion was formed by the Proper VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document CWP- 12072- -2026 (O&M) Officer on the basis whereof the petitioner’s fficer on the basis whereof the petitioner’s registratio registration was rightly ordered to be cancelled. to be cancelled.

5. Learned counsel for the parties have been heard. Learned counsel for the parties have been heard. Learned counsel for the parties have been heard. how cause notice dated 03.02.2026 issued to the The show cause notice dated 03.02.2026 issued to the The s petitioner and the impugned cancellation petitioner and the impugned order dated 03.03.2026 are reproduced hereinafter for ready reference:- reproduced hereinafter for ready refere Show Cause Notice For Cancellation Show Cause Notice For Cancellation Of Registration 17 (See Rule 22(1)] FORM GST REG-17 (See Rule 22(1)] Reference No.: ZA0302260035329 Date: 03/02/2026 Reference No.: ZA0302260035329 Date: 03/02/2026 Reference No.: ZA0302260035329 Date: 03/02/2026 To To Registration Number (GSTIN/UIN): 03AAUFN9251C1Z6 Registration Number (GSTIN/UIN): 03AAUFN9251C1Z6 Registration Number (GSTIN/UIN): 03AAUFN9251C1Z6 NEELKANTH ENTERPRISES NEELKANTH ENTERPRISES 221, Alaur, Ludhiana, Punjab, TEHSIL KHANNAH B NO 221, Alaur, Ludhiana, Punjab, TEHSIL KHANNAH B NO 141401 141401 Show Cause Notice for Cancellation of Registration Show Cause Notice for Cancellation of Registration 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: Person does not conduct any business from 1. Rule 21(a) - Person does not conduct any business from 1. 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 2. Rule 21(b) person issues invoice or bill without supply of 2. Rule 21(b)- person issues invoice or bill without supply of goods or services or both in violation of the provisions of the goods or services or both in violation of the provisions of the goods or services or both in violation of the provisions of the Act, or the rules made thereunder Act, or the rules made thereund person violates the provision of rule 10A (Bank 3. Rule 21(d)-person violates the provision of rule 10A (Bank 3. Rule 21(d) details) details) 4. Rule 21 (e) person avails ITC in violation of the provisions 4. Rule 21 (e)-person avails ITC in violation of the provisions 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) Remarks: Remarks: During physical verification of Principal place of Business, the During physical verification of Principal place of Business, the During physical verification of Principal place of Business, the traceable/non existent. Further, taxpayer was found to be non-traceable/non existent. Further, taxpayer was found to be non on verification of the record available at portal, major L1/L2 on verification of the record available at portal, major L1/L2 on verification of the record available at portal, major L1/L2 suppliers of the taxpayer were found to be cancelled/suspended suppliers of the taxpayer were found to be cancelled/suspended suppliers of the taxpayer were found to be cancelled/suspended moto by the department. It appears that the Noticee had suo-moto by the department. It appears that the Noticee had availed ineligible ITC from these suspicious suppliers whose availed ineligible ITC from these suspicious suppliers whose availed ineligible ITC from these suspicious suppliers whose regn. had already been cancelled as on date and details of regn. had already been cancelled as on date and details of regn. had already been cancelled as on date and details of some of these cancelled major suppliers (as on date) whose some of these cancelled major suppliers (as on date) whose some of these cancelled major suppliers (as on date) whose retrospectively due to their involvement in regn. was cancelled retrospectively due to their involvement in regn. was cancelled suspicious activities of passing/receiving of fake/bogus ITC, is suspicious activities of passing/receiving of fake/bogus ITC, is suspicious activities of passing/receiving of fake/bogus ITC, is as under: - as under: (i) 07CHJPJ8476R1Z8 (cancelled w.e.f. 09.05.2025) (i) 07CHJPJ8476R1Z8 (cancelled w.e.f. 09.05.2025) (i) 07CHJPJ8476R1Z8 (cancelled w.e.f. 09.05.2025) (ii) 07AVJPK2380B1ZU (cancelled w.e.f. 14.01.2025) (ii) 07AVJPK2380B1ZU (cancelled w.e.f. 14.01.2025) (ii) 07AVJPK2380B1ZU (cancelled w.e.f. 14.01.2025) (ii) 07CGHPA6664F1ZG (cancelled w.e.f. 17.03.2025) (ii) 07CGHPA6664F1ZG (cancelled (ii) 07CGHPA6664F1ZG (cancelled (iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) (iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) (iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) etc. etc. VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document CWP- 12072- -2026 (O&M) facts, facts, facts, that retrospective that retrospective that retrospective it appears it appears In view of above In view of above it appears In view of above cancellation of registration is warranted: cancellation of registration is warranted: cancellation of registration is warranted: To prevent misuse of Input Tax Credit (ITC) through fictitious -To prevent misuse of Input Tax Credit (ITC) through fictitious To prevent misuse of Input Tax Credit (ITC) through fictitious invoicing, invoicing, -To break the fraudulent ITC chain, To break the fraudulent ITC chain, -To nullify GSTINs obtained through misrepresentation, and To nullify GSTINs obtained through misrepresentation, and To nullify GSTINs obtained through misrepresentation, and To safeguard government revenue from non-compliant and To safeguard government revenue from non -To safeguard government revenue from non non-existent taxpayers. In view of above facts, it is requested to pay the above said In view of above facts, it is requested to pay the above said In view of above facts, it is requested to pay the above said amount alongwith applicable interest & penalty, failure which amount alongwith applicable interest & penalty, failure which your regn. will be cancelled with retrospective effect. your regn. will be cancelled with retrospective effect. your regn. will be cancelled with retrospective effect. You are also requested to appear for Personal Hearing (PH) You are also requested to appear for Personal Hearing (PH) You are also requested to appear for Personal Hearing (PH) on the given date and time, along with documents e.g. tax paid on the given date and time, along with documents e.g. tax paid on the given date and time, along with documents e.g. tax paid challan in form of DRC 03 against above said amount, challan in form of DRC-03 against above documents in respect of establishing the existence of the unit at documents in respect of establishing the existence of the unit at documents in respect of establishing the existence of the unit at the registered premises etc. the registered premises etc. Failure to appear or provide the required documents may Failure to appear or provide the required documents may Failure to appear or provide the required documents may result in cancellation of GST registration with retrospective result in cancellation of GST registration with retrospective result in cancellation of GST registration with retrospective effect under Rule 22 of the C GST Rules, 2017, based on the effect under Rule 22 of the CGST Rules, 2017, based on the facts already available on record. facts already available on record. facts already available on record. 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 on 12/02/2026 at 11:50. authority on 12/02/2026 at 11:50. authority 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 decided ex parte on the basis of available records the case will decided ex parte on the basis of available records the case will decided ex parte on the basis of available records and on merits. and on merits. egistration stands suspended with effect Please note that your registration stands suspended with effect Please note that your r from 02/09/2023. from 02/09/2023. 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: 03/02/2026 Date: 03/02/2026 Manjit Kaur Superintendent RANGE-V” Order for Cancellation of Registration Order for Cancellation of Registration FORM GST REG-19 [Se 19 [See rule 22(3)] Reference Number: ZA0303260033074 Date:03/03/2026 Reference Number: ZA0303260033074 Reference Number: ZA0303260033074 TO TO Name: NEELKANTH ENTERPRISES Name: NEELKANTH ENTERPRISES Name: NEELKANTH ENTERPRISES Address: TEHSIL KHANNAH B NO 221, Alaur, Ludhiana Address: TEHSIL KHANNAH B NO 221, Alaur, Ludhiana Address: TEHSIL KHANNAH B NO 221, Alaur, Ludhiana Punjab, 141401 Punjab, 141401 GSTIN/UIN: 03AAUFN9251C126 GSTIN/UIN: 03AAUFN9251C126 GSTIN/UIN: 03AAUFN9251C126 Application Reference Number (ARN): AA030226002654R Application Reference Number (ARN): AA030226002654R Application Reference Number (ARN): AA030226002654R Date: 12/02/2026 Date: 12/02/2026 VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document Order for Cancellation of Registration Order for Cancellation of Registration Order for Cancellation of Registration CWP- 12072- -2026 (O&M) This has reference to show cause notice issued dated This has reference to show cause notice issued dated This has reference to show cause notice issued dated 03/02/2026. 03/02/2026. Whereas reply to the show cause notice has been submitted Whereas reply to the show cause notice has been submitted Whereas reply to the show cause notice has been submitted vide AA030226002654R dated 12/02/2026; and vide AA030226002654R dated 12/02/2026; and whereas, the vide AA030226002654R dated 12/02/2026; and undersigned on examination of your reply to show cause notice undersigned on examination of your reply to show cause notice undersigned on examination of your reply to show cause notice and based on record available with this office is of the opinion and based on record available with this office is of the opinion and based on record available with this office is of the opinion that your registration is liable to be cancelled for following that your registration is liable to be cancelled for following that your registration is liable to be cancelled for following reason(s): reason(s):

1. Rule 21(a) 1. Rule 21(a)- Person does not conduct an 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 does not conduct any business from

2. Rule 21(b) person issues invoice or bill without supply of 2. Rule 21(b)- person issues invoice or bill without supply of goods or services or both in violation of the provisions of the goods or services or both in violation of the provisions of the goods or services or both in violation of the provisions of the Act, or the rules made thereunder Act, or the rules made thereunder Act, or the rules made thereunder violates the provision of rule 10A (Bank 3. Rule 21(d)-person violates the provision of rule 10A (Bank 3. Rule 21(d) details) details)

4. Rule 21(e) person avails ITC in violation of the provisions 4. Rule 21(e)-person avails ITC in violation of the provisions 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 868 5. Rule 21(g)-person violates the provision of rule 868 5. Rule 21(g) Remarks: Remarks: ication of Principal place of Business, the During physical verification of Principal place of Business, the During physical verif traceable/non existent. Further, taxpayer was found to be non-traceable/non existent. Further, taxpayer was found to be non on verification of the record available at portal, major L1/L2 on verification of the record available at portal, major L1/L2 on verification of the record available at portal, major L1/L2 suppliers of the taxpayer were found to be cancelled/suspended suppliers of the taxpayer were found to be cancelled/suspended suppliers of the taxpayer were found to be cancelled/suspended nt. It appears that the Noticee had suo-moto by the department. It a led ineligible ITC from these suspicious suppliers whose availed ineligible ITC from these suspicious suppliers whose regn. had already been cancelled as on date and details of regn. had already been cancelled as on date and details of regn. had already been cancelled as on date and details of some of these cancelled major suppliers (as on date) whose some of these cancelled major suppliers (as on date) whose some of these cancelled major suppliers (as on date) whose regn. was cancelled retrospectively due t regn. was cancelled retrospectively due to their involvement in regn. was cancelled retrospectively due t suspicious activities of passing/receiving of fake/bogus ITC, is suspicious activities of passing/receiving of fake/bogus ITC, is suspicious activities of passing/receiving of fake/bogus ITC, is as under: - as under: ) 07CHJPJ8476R1Z8 (cancelled w.e.f. 09.05.2025) (i) 07CHJPJ8476R1Z8 (cancelled w.e.f. 09.05.2025) (i ) 07AVJPK2380B1ZU (cancelled w.e.f. 14.01.2025) (ii) 07AVJPK2380B1ZU (cancelled w.e.f. 14.01.2025) (ii ) 07CGHPA6664F1ZG (cancelled w.e.f. 17.03.2025) (iii) 07CGHPA6664F1ZG (cancelled w.e.f. 17.03.2025) (i iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) (iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) iv) 07MZBPS3001D1ZM (cancelled w.e.f. 28.04.2025) etc. etc. it appears it appears In view of above it appears In view of above In view of above cancellation of registration is warranted: cancellation of registration is warranted: cancellation of registration is warranted: To prevent misuse of Input Tax Credit (ITC) through fictitious -To prevent misuse of Input Tax Credit (ITC) through fictitious To prevent misuse of Input Tax Credit (ITC) through fictitious invoicing, invoicing, To break the fraudulent ITC chain, To nullify GSTINs To break the fraudulent ITC -To break the fraudulent ITC obtained through misrepresentation, and obtained through misrepresentation, and obtained through misrepresentation, and that retrospective that retrospective that retrospective facts, facts, facts, To safeguard government revenue from non-compliant and To safeguard government revenue from non -To safeguard government revenue from non non-existent taxpayers. VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document CWP- 12072- -2026 (O&M) In view of above facts, it is requested to pay the above said In view of above facts, it is requested to pay the above said In view of above facts, it is requested to pay the above said amount alongwith ap plicable interest & penalty, failure which amount alongwith applicable interest & penalty, your regn. will be cancelled with retrospective effect. your regn. will be cancelled with retrospective effect. your regn. will be cancelled with retrospective effect. The effective date of cancellation of your registration is The effective date of cancellation of your registration is 02/09/2023. 02/09/2023. 2. Kindly refer to the supportive document(s) attached for case 2. Kindly refer to the supportive document(s) attached for case 2. Kindly refer to the supportive document(s) attached for case specific details. - Not Applicable specific details. noted that a registered person furnishing return 3. It may be noted that a registered person furnishing return 3. It may be under sub section (1) of section 39 of the CGST Act, 2017 is under sub-section (1) of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR required to furnish a final return in FORM GSTR-10 within required to furnish a final return in FORM GSTR three months of the date of this order. three months of the date of this order. three months of the date of this order.

4. You are required to furnish all your pending returns. 4. You are required to furnish all your pending 4. You are required to furnish all your pending

5. It may be noted that the cancellation of registration shall not 5. It may be noted that the cancellation of registration shall not 5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this Act or affect the liability to pay tax and other dues under this Act or affect the liability to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made to discharge any obligation under this Act or the rules made to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of thereunder for any period prior to the date of cancellation thereunder for any period prior to the date of whether or not such tax and other dues are determined before whether or not such tax and other dues are determined before whether or not such tax and other dues are determined before or after the date of cancellation. or after the date of cancellation Place: CBIC Place: CBIC Date: 03/03/2026 Date: 03/03/2026 Manjit Kaur Superintendent Range-V”

6. A perusal of the afore-quoted show cause notice and A perusal of the afore quoted show cause notice and the impugned cancellation order clearly reveals that the reasons to cancel the cancellation order clearly reveals that the reasons to cancel the petitioner’s GST registration are merely a copy of the reasons contained in itioner’s GST registration are merely a copy of the reasons contained in the impugned order. the show cause notice which preceded the impugned order. the show cause

7. A perusal of the impugned order dated 03.03.2026 A order dated 03.03.2026 further reveals that in the cancellation order the Proper Officer has reveals that in the cancellation order roper Officer has simply rejected s reply by stating therein that the same has been examined. the petitioner’s reply by stating therein that the same has been examined. s reply by stating therein that the same has been examined.

8. None of the grounds taken by the petitioner in its written None of the grounds taken by the petitioner in its written None of the grounds taken by the petitioner in its written response have even been touched. It has also not been s response have even been touched. It has also not been stated in the impugned order that the petitioner’s written response was found to be not impugned order that the petitioner’s written response impugned order that the petitioner’s written response satisfactory. VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document CWP- 12072- -2026 (O&M)

9. In light of the above, the impugned cancellation order dated In light of the above, the impugned In light of the above, the impugned

03.03.2026 is found to be in gross violation of the principles of natur 03.03.2026 is found to be in gross violation of the principles of natural justice and without application of mind. Therefore, we have no hesitation to justice and without application of mind. Therefore, we have no hesitation to justice and without application of mind. Therefore, we have no hesitation to set aside the order dated 03.03.2026 (Annexure P-4). However, the set aside the order dated 03.03.2026 (Annexure P set aside the order dated 03.03.2026 (Annexure P espondents are at liberty to proceed against the petitioner afresh in respondents are at liberty to proceed against the petitioner espondents are at liberty to proceed against the petitioner accordance with law. accordance with law.

10. The prayer made in this petition with regard to The prayer made in this petition with regard to challenge of the vires of Section 29(2) and Section 16(2)(c) vires of Section 29(2) and Section 16(2) (c) of the Central Goods and Services Tax Act, 2017 is kept open to be decided Services Tax Act, 2017 open to be decided in an appropriate case.

11. 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 22, 2026 vandana Whether speaking/reasoned : ther speaking/reasoned : Whether reportable : Whether reportable Yes/No Yes/No VANDANA 2026.05.01 09:39 I attest to the accuracy and integrity of this document