Shreyash Enterprises Vs State of Uttar Pradesh And 2 Others (Allahabad High Court)
Allahabad High Court reinforces the requirement of a subsisting and ascertainable statutory contravention before invoking Section 29(2)(a)
The judgment of the Allahabad High Court in M/s Shreyash Enterprises v. State of U.P. & 2 Others, Writ Tax No. 3348 of 2026, decided on 04/08/2026, presents an important proposition concerning the exercise of the power to cancel GST registration under Section 29 where the alleged statutory contravention is itself the subject matter of pending adjudication.
The decision is significant because the Court did not merely examine whether the petitioner had been afforded an opportunity to respond to the show cause notice. Instead, the Court examined the jurisdictional foundation of the cancellation proceedings themselves. The central question was whether an allegation that the taxpayer had availed, utilised or passed on bogus input tax credit could be treated as an established contravention when the underlying adjudication proceedings were still pending.
The Court answered the question against the Revenue.
1. Factual and procedural background
The petitioner, M/s Shreyash Enterprises, approached the Allahabad High Court challenging a show cause notice proposing cancellation of its GST registration.
The principal objection raised on behalf of the petitioner was that the notice proceeded on the premise that the petitioner had availed, utilised and/or passed on bogus input tax credit, although the proceedings in which that allegation was required to be adjudicated had not yet culminated in any final determination.
