Dwarkadhish Metals Vs Union of India and others (Punjab and Haryana High court)
The Punjab and Haryana High Court examined the validity of a show cause notice dated 10.03.2026 and a subsequent order dated 02.04.2026 cancelling GST registration retrospectively. The petitioner challenged both actions on the grounds of vagueness, lack of supporting material, and violation of principles of natural justice.
The show cause notice alleged violations under Rule 21(b) and Rule 21(e) of the CGST Act, including issuance of invoices without supply and wrongful availment of input tax credit (ITC). However, the petitioner argued that the notice did not contain any substantive reasons or supporting documents, despite referring to such documents. It was also contended that the notice failed to indicate any intention to cancel the registration retrospectively.
The petitioner further submitted that the cancellation order suffered from multiple legal defects: it was based on a vague notice, it did not consider the petitioner’s written response, and it imposed retrospective cancellation from 24.09.2020 without prior notice of such action.
The respondent authorities conceded that no supporting documents were attached to the show cause notice and that no specific notice had been issued regarding retrospective cancellation.
Upon examining the record, the Court found that both the show cause notice and the cancellation order were vague and lacked meaningful reasons. The Court observed that although the notice referred to supporting documents, none were actually provided. It also noted that the petitioner had not been put on notice regarding the intention to cancel registration retrospectively, which was later imposed in the final order.
