R K I Builders Private Limited Vs Superintendent of Central Taxes (Andhra Pradesh High Court)
The Andhra Pradesh High Court delivered a judgment in the case of R K I Builders Private Limited Vs Superintendent of Central Taxes, challenging an order that retrospectively cancelled the petitioner’s Goods and Services Tax (GST) registration.
Factual Background
R K I Builders Private Limited, a company engaged in ‘Works Contract Services,’ obtained GST registration on July 17, 2018. Following a Corporate Insolvency Resolution Process (CIRP) and a management takeover by the National Company Law Tribunal (NCLT) on January 29, 2025, the company allegedly failed to file returns from February 2025 onwards. The Superintendent of Central Taxes issued a show cause notice (SCN) on May 22, 2025, proposing to cancel the registration on the grounds that the petitioner was not conducting business at the declared place. Subsequently, the respondent issued an order on June 15, 2025, cancelling the GST registration with retrospective effect from July 1, 2017.
Issue and Holding
The petitioner challenged the retrospective cancellation, arguing that while the SCN proposed cancellation, it did not mention that the cancellation would take effect from a prior date (July 1, 2017).
The High Court accepted the petitioner’s argument, holding that the order of cancellation was liable to be set aside on the simple ground of violation of principles of natural justice. The court emphasized that the purpose of a show cause notice is to inform the noticee of the proposed action. Any action taken by the authority beyond the terms of the SCN, such as imposing a retrospective cancellation date not contemplated in the notice, deprives the affected person of an opportunity to explain or respond to that specific action.
