North Steel India Vs Union of India (Punjab and Haryana High Court)
Summary: The Punjab and Haryana High Court allowed the writ petition filed by M/s North Steel India and set aside the show cause notice dated 05.01.2026 proposing cancellation of the petitioner’s GST registration. The Court held that the notice was violative of the principles of natural justice because the material relied upon by the department was not supplied to the petitioner.
The petitioner’s counsel restricted the challenge to the show cause notice concerning cancellation of GST registration. The notice, issued in Form GST REG-17, invoked Section 29(2)(e) of the CGST Act and clauses (a), (b), (e) and (g) of Rule 21 of the CGST Rules. The stated grounds included alleged fraud, wilful misstatement or suppression of facts; non-conduct of business from the declared place; issuance of invoices without supply; wrongful availment of ITC; and violation of Rule 86B.
The remarks in the notice stated that the firm had been found non-existent during physical verification conducted by SGST authorities. It further alleged that major suppliers of the firm had had their registrations cancelled suo motu from the date of registration for passing fake ITC, and that the petitioner had been operating only on paper and had been availing and passing fake ITC without actual movement of goods. The notice consequently proposed retrospective cancellation from the date of registration and warned of further proceedings for recovery of government dues.
