Anil Art And Craft Vs State of Uttar Pradesh & Anr. (Supreme Court of India)
The dispute arose from an order dated 03.02.2026 passed by the Deputy Commissioner, State Tax, Sector-2, Bhadohi, cancelling the petitioners’ GST registration under the U.P.G.S.T. Act, 2017. Before the Allahabad High Court, the petitioners submitted that following a D.G.G.I. search under the C.G.S.T. Act, 2017, proceedings under Section 61 had been initiated by notice dated 23.09.2025 and were still pending. During the pendency of those proceedings, a show cause notice dated 08.10.2025 under Section 29 was issued, resulting in cancellation of registration. The petitioners contended that the cancellation was without jurisdiction as the Section 61 proceedings had not concluded and that no premature conclusion should be drawn on allegations that their suppliers were fake. The State submitted that the petitioners had an effective statutory appellate remedy and that proceedings for adjudication and recovery of tax could run simultaneously with proceedings for cancellation of registration.
Read Allahabad HC Judgment in this case: HC Declines GST Registration Cancellation Challenge, Directs Statutory Appeal Under Section 29
The High Court held that the allegations involved disputed questions of fact which could not be examined in writ jurisdiction and should be decided on evidence before the statutory forum. It observed that Rule 21(b) could permit cancellation where allegations of fake supplies were ultimately proved and that allegations of fake supplies could simultaneously give rise to cancellation proceedings and proceedings for confirmation of demand involving reversal of ITC. The Court rejected the contention that registration had been cancelled merely because Section 61 proceedings were pending, observing that the impugned order only recorded that those proceedings had not concluded. It also declined to examine the pendency of the D.G.G.I. investigation at that stage.
