Sr. No.125 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. Mr. Umesh Sarwal, Advocate, for the petitioner. for the petitioner. Sourabh Goel, Senior Standing Counsel Mr. Sourabh Goel, Senior Standing Counsel Mr. for the respondents. for the respondents. DEEPAK SIBAL, J. (Oral) DEEPAK SIBAL *** It is not disputed that the evidence relied upon by the It is not disputed that the evidence relied upon by the It is not disputed that the evidence relied upon by the respondents to cancel the petitioner’s GST registration was not supplied to respondents to cancel the petitioner’s GST registration was not supplied to respondents to cancel the petitioner’s GST registration was not supplied to the petitioner before passing of the impugned cancellation order dated the petitioner before passing of the impugned cancellation order dated the petitioner before passing of the impugned cancellation order dated

19.02.2026.

2. In light of the above, the petitioner’s case is covered in its In light of the above, the petitione In light of the above, the petitione 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 apposite to note that while such power of retrospective cancellation of registra tion 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 reasons for such CGST Act must definitely reflect the reasons for such CGST Act must definitely reflect the reasons for such cancellation with retrospective effect. cancellation with retrospective effect. Furthermore, it is a cancellation with retrospective effect. 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 CWP- 17219- -2026 -2- which such action is sought to be taken. Hon'ble th which such action is sought to be taken. Hon'ble the Supreme which such action is sought to be taken. Hon'ble th 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 "24. It is well settled that a quasi-judicial authority, while acting in exercise of its statutory 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 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 reasonable person opportunity of making his objection against the opportunity of making his objection against the proposed charges indicated in the notice.” proposed charges indicated in the notice. proceeded proceeded against against a a

14. Thus a show cause notice must contain the basic Thus a show cause noti 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 action put petitioners to notice about the proposal to take action against them with retrospective effect and su against them with retrospective effect and supply or at least against them with retrospective effect and su 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 petitioners. (emphasis supplied)

3. In view of the above, the impugned order dated In of the above, the impugned order dated 19.02.2026 (Annexure P-9 9), through which the petitioner’s through which the petitioner’s GST registration has been is quashed. However, liberty is granted to the retrospectively cancelled, is quashed. However, liberty is granted to the retrospectively respondents to proceed afresh against the petitioner, in accordance with law. respondents to proceed afresh against the petitioner, in respondents to proceed afresh against the petitioner, in

4. 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

27.05.2026 Prince ther speaking/reasoned : Whether speaking/reasoned : Whether reportable : Whether reportable Yes/No Yes/No