CWP v. State of Punjab

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. for the petitioner. Mr. Tarang Goyal, Advocate for the petitioner. Mr. Saurabh Kapoor, Addl. A. G. Punjab. Mr. Saurabh Kapoor, Addl. A. G. Punjab. Mr. Saurabh Kapoor, Addl. A. G. Punjab. DEEPAK SIBAL, J. (Oral) DEEPAK SIBAL *** It is not disputed that before retrospective It is not disputed that before retrospective cancellation of the

10.08.2021 (Annexure petitioner’s GST registration through order dated 10.08.2021 (Annexure petitioner’s GST registration through order dated petitioner’s GST registration through order dated no show cause notice was served upon the petitioner, informing the no show cause notice was served upon the petitioner, P-3), no show cause notice was served upon the petitioner, d to retrospectively cancel its GST petitioner that the respondents intended to retrospectively cancel its GST petitioner that the registration.

2. In light of the above, the petitioner’s case is covered in its In light of the above, the petitioner’s case is covered in In light of the above, the petitioner’s case is covered in favour by the following observations in the following observations in a recent a recent judgment of a Division Bench of this Court dated 20.02.2026 in CWP No.16770 of 2024 Bench of this Court dated CWP No.16770 of 2024 – M/s Bansal Casting vs. Union of India and another:- Bansal Casting vs. Union of India and another Bansal Casting vs. Union of India and another “13. Undoubtedly, there is a provision for retrospective “13. Undoubtedly, there is a provision for retrospective “13. Undoubtedly, there is a provision for retrospective cancellation of registration in terms of Section 29 of CGST cancellation of registration in terms of Section 29 of CGST cancellation of registration in terms of Section 29 of CGST Act, subject to the provisions as contained therein. It is Act, subject to the provisions as contained therein. It is Act, subject to the provisions as contained therein. It is apposite to note that while such power of retrospective apposite to note that while such power of retrospective cancellation of registration is definitely conferred, it is cancellation of registration is definitely conferred, it is cancellation of registration is definitely conferred, it is apparent that such action can be taken only upon existence of apparent that such action can be taken only upon existence of apparent that such action can be taken only upon existence of specific contingencies and that an order under Section 29(2) of specific contingencies and that an order under Section 29(2) of specific contingencies and that an order under Section 29(2) of CGST Act must definitely reflect the reaso CGST Act must definitely reflect the reasons for such CGST Act must definitely reflect the reaso cancellation with retrospective effect. Furthermore, it is a cancellation with retrospective effect. Furthermore, it is a cancellation with retrospective effect. Furthermore, it is a basic, accepted and settled principle that concerned authority basic, accepted and settled principle that concerned authority basic, accepted and settled principle that concerned authority is enjoined upon to put the assessee to notice of the action is enjoined upon to put the assessee to notice of the action is enjoined upon to put the assessee to notice of the action which is intended to be taken and reasons or the premise on which is intended to be taken and reasons or the premise on which is intended to be taken and reasons or the premise on which such action is sought to be taken. Hon'ble the Supreme which such action is sought to be taken. Hon'ble the Supreme which such action is sought to be taken. Hon'ble the Supreme CWP-16867 16867-2026 -2- Court in ORYX Fisheries Pvt. Ltd. Vs. Union of India and Court in ORYX Fisheries Pvt. Ltd. Vs. Union of India and Court in ORYX Fisheries Pvt. Ltd. Vs. Union of India and others, 2010(13) SCC 427, has held as under:- others, 2010(13) SCC 427, has held as under: others, 2010(13) SCC 427, has held as under: "24. It is well settled that a quasi-judicial "24. It is well settled that a quasi authority, while acting in exercise of its s authority, while acting in exercise of its statutory power must act fairly and must act with an open power must act fairly and must act with an open mind while initiating a show cause proceeding. A mind while initiating a show cause proceeding. A show cause proceeding is meant to give the show cause proceeding is meant to give the reasonable person person reasonable opportunity of making his objection against the opportunity of making his objection against the proposed charges indicated in the notice.” proposed charges indi proceeded proceeded against against a a Thus a show cause notice must contain the basic Thus a show cause notice must contain the basic 14. 14. grounds or premises on which action is sought to be taken. In grounds or premises on which action is sought to be taken. In grounds or premises on which action is sought to be taken. In the present matters, it was incumbent upon authorities to have the present matters, it was incumbent upon authorities to have the present matters, it was incumbent upon authorities to have put petitioners to notice about the proposal to take action put petitioners to notice about the proposal to take put petitioners to notice about the proposal to take against them with retrospective effect and supply or at least against them with retrospective effect and supply or at least against them with retrospective effect and supply or at least mention the material on which reliance was placed. Moreover, mention the material on which reliance was placed. Moreover, mention the material on which reliance was placed. Moreover, once mentioned in show cause notice itself, that supporting once mentioned in show cause notice itself, that supporting once mentioned in show cause notice itself, that supporting documents are attached, such material should have been documents are attached, such material should have been documents are attached, such material should have been supplied to petitioners. supplied to (emphasis supplied)

3. Learned State counsel has not Learned has not been able to distinguish the (supra) to the petitioner’s case. applicability of M/s Bansal Casting’s case (supra) to the petitioner’s case. applicability of

4. In the light of the above, the impugned order dated In the impugned order dated 10.08.2021 (Annexure P-3 3), through which the petitioner’s through which the petitioner’s GST registration has been retrospectively cancelled and retrospectively liberty is granted to the respondents to proceed afresh against the petitioner, liberty is granted to the respondents to proceed liberty is granted to the respondents to proceed are quashed. However, in accordance with law. in accordance with law.

5. 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

26.05.2026 Jyoti Thakur Whether speaking/reasoned : Whether reportable : Yes/No Yes/No Yes/No Yes/No