Retrospective GST Registration Cancellation invalid if Not Proposed in SCN: Delhi HC

By CA Sandeep Kanoi Goods and Services Tax Judiciary October 21, 2025

TaxGuru Citation: 2025 taxguru.in 9339
Case Name: Ajay Gupta Vs Sales Tax Officer Class II/Avato & Anr (Delhi High Court): W.P.(C) 14099/2025
Appeal Number: Only available for paid members
Courts: All High Courts, Delhi High Court

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Ajay Gupta Vs Sales Tax Officer Class II/Avato & Anr (Delhi High Court)

The Delhi High Court delivered a judgment in the case of Ajay Gupta v. Sales Tax Officer Class II/Avato & Anr., which challenged an order for the retrospective cancellation of a Goods and Services Tax (GST) registration. The core issue before the court was the validity of cancelling a GST registration with retrospective effect when the initial Show Cause Notice (SCN) did not propose or indicate such a retrospective action.

Factual Background

The petitioner, Ajay Gupta, was granted GST registration effective from July 1, 2017, and filed his last GST returns in June 2022. He subsequently applied for the cancellation of his registration on July 22, 2022.

The Sales Tax Officer, Ward-82, GST Department, issued two SCNs to the petitioner.

1. SCN-1 (Dated May 27, 2024): This notice was issued concerning the petitioner’s application for cancellation. It sought additional information, including copies of the stock register, details of Input Tax Credit (ITC) held in stock, details of output tax payable, and details of ITC availed on capital goods. This SCN advised that the cancellation application was liable for rejection if no response was received. The application was later rejected on June 7, 2024.

2. SCN-2 (Dated June 11, 2024): This notice proposed the cancellation of the registration for the reason of “Failure to furnish returns for a continuous period of six months” under Section 39 of the Central Goods and Services Tax Act, 2017. Critically, the notice did not propose to cancel the registration with retrospective effect; it only stated that the registration stood suspended from the date of the notice (June 11, 2024).

The petitioner failed to file a reply to SCN-2, and consequently, the department passed the impugned order dated September 6, 2024. This order cancelled the petitioner’s GST registration retrospectively, effective from July 1, 2017, the date the registration was originally granted.