MRJ Trading Vs Commissioner (Delhi High Court)
Summary: The Delhi High Court set aside the retrospective effect of the cancellation of GST registration of MRJ Trading, a proprietary concern of Sambhav Jain. The cancellation order dated 25 June 2025 had made the cancellation effective from 1 October 2024 following a show cause notice alleging non-filing of returns for six continuous months. The petitioner stated that the business had closed, that he did not wish to retain registration, and that pending returns had been filed on 3 August 2026. The Department confirmed that there was no allegation of wrongdoing against the petitioner. The Court held that because the show cause notice had not proposed retrospective cancellation, such retrospective effect could not be imposed. Referring to Smart World Communications vs. Commissioner of Central Tax and CGST, Delhi North, the Court set aside the cancellation order only insofar as it operated retrospectively; cancellation remained effective prospectively.
Cases Discussed
- Smart World Communications vs. Commissioner of Central Tax and CGST, Delhi North, W.P.(C) 13747/2025, (2025) 34 Centax 427 (Del.) — Relied upon regarding retrospective cancellation of GST registration.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The Petitioner prays for quashing of the order dated 25.06.2025, whereby his GST Registration No. 07BAGPJ6722B1Z2 was cancelled with effect from 01.10.2024.
2. The Petitioner was served with a Show Cause Notice alleging that he had failed to file returns for a continuous period of six (06) months.
3. The Petitioner had also applied for cancellation of his GST Registration, which application was rejected on 11.03.2025.
4. Learned counsel representing the Petitioner submits that the Petitioner has already closed his business and is no longer interested in continuing with his GST Registration. It is further submitted that the Petitioner has filed his pending returns on 03.08.2026.
5. Learned counsel representing the Respondent, upon verification of the facts, submits that, as of now, there is no allegation of any wrongdoing on the part of the Petitioner.
6. The Show Cause Notice issued to the Petitioner did not indicate any intention on the part of the Department to cancel his GST Registration with retrospective effect. In the absence of any such intention having been indicated in the Show Cause Notice, the cancellation of the GST Registration with retrospective effect could not have been ordered.
7. Learned counsel representing the Petitioner also relies upon the judgment passed by the Division Bench of this Court in W.P.(C) 13747/2025, titled Smart World Communications vs. Commissioner of Central Tax and CGST, Delhi North¹.
8. Keeping in view the aforesaid position, the order cancelling the Petitioner’s GST Registration with retrospective effect is set aside. However, the cancellation of the GST Registration shall continue to operate prospectively.
Note:
¹ (2025) 34 Centax 427 (Del.)
