Eworld Business Solutions Private Limited Vs Superintendent (Delhi High Court)
Conclusion: Since the SCN did not propose retrospective cancellation or raise the issue of non-existent premises, the impugned cancellation order was unsustainable therefore, assessee’s GST registration should be treated as cancelled only from 31 December 2024, the date of the SCN.
Held: Assessee-company filed a writ petition challenging the cancellation of its GST registration by an order dated 18 March 2025, which cancelled its registration retrospectively from 1 July 2017. Assessee had received a show cause notice for non-filing of returns. Soon after, on 15 January 2025, assessee filed all pending returns and paid the dues along with interest and late fees. Assessee argued that under Rule 22(4) of the CGST Rules, once returns and dues were cleared, the proceedings must be dropped. The cancellation order was issued retrospectively and also relied on a new ground that assessee was not found at its business premises during physical verification, although this was never mentioned in the SCN. Revenue confirmed that assessee had filed the returns and made the payments but argued that cancellation was justified because the premises were not found operational at the given address. It was held that cancellation order went beyond the reasons stated in the SCN. The court explained that retrospective cancellation of GST registration carried serious consequences such as affecting the input tax credit of buyers and could not be applied mechanically. The court pointed out that since the SCN did not propose retrospective cancellation or raise the issue of non-existent premises, the impugned order was unsustainable. The court set aside the cancellation order dated 18 March 2025 and directed that assessee’s GST registration should be treated as cancelled only from 31 December 2024, the date of the SCN. The alert notice issued on 27 May 2025 was also quashed. The department was given liberty to initiate fresh proceedings if there were any other violations under the law. The writ petition was allowed.
