Namdhari Timber Private Limited Vs Union of India & Ors. (Delhi High Court)
The Delhi High Court considered a writ petition challenging a show cause notice dated 28 November 2024 and an order dated 5 March 2025 cancelling the petitioner’s GST registration retrospectively from 1 July 2017. The petitioner did not contest cancellation itself but objected to its retrospective effect, stating that cancellation may be applied from the date of the show cause notice.
The record showed that earlier proceedings had arisen when the petitioner sought amendment of its principal place of business, which was rejected ex parte due to non-submission of documents. Subsequently, a show cause notice was issued alleging that the petitioner’s place of business was found non-existent upon inspection. The petitioner neither replied to the notice nor appeared for hearing, following which the registration was cancelled with retrospective effect.
The Court noted that it is a settled legal position that retrospective cancellation cannot be imposed unless the show cause notice specifically contemplates such action. Since the impugned notice did not indicate retrospective cancellation, the resulting order granting such effect was unsustainable.
Accordingly, the Court set aside the retrospective operation of the cancellation order. It clarified that the Department retains the right to initiate fresh proceedings, including issuance of a new show cause notice, if grounds such as non-existence of business are established. The petitioner was also permitted to place relevant material, including the de-sealing of its premises, before authorities in any future proceedings.
