S.29 CGST Act | SCN Must Reflect Both Reasons And Intent Of Retrospective Cancellation Of Registration: Delhi High Court

A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “in the absence of reasons having been assigned in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action.”

The Court was dealing with the case of a Limited Liability Partnership whose GST registration was cancelled under 29 of the Central Goods and Service Tax Act, 2017, with retrospective effect from 09 November 2017.

After dismissal of its appeal by the Additional Commissioner of GST, the Petitioner approached the High Court in its writ jurisdiction.

At the outset, the High Court noted that neither the SCN nor the final order alluded to any material on the basis of which the authority formed the opinion that Section 29(2)(e) of the GST Act was violated. The provision permits cancellation of GST registration if obtained by means of fraud, wilful misstatement or suppression of facts. The documents did not even embody an intent of proposed retrospective cancellation of Petitioner's GST registration.

It is in this backdrop that the High Court set aside the impugned order. It cited Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. (2024) where a coordinate bench of the High Court had held that mere conferral of power to cancel GST registration with retrospective effect under Section 29 of the Goods and Services Tax Act 2017 would not justify a revocation.

It was held, “The order under Section 29(2) must itself reflect the reasons which may have weighed upon the respondents to cancel registration with retrospective effect. Given the deleterious consequences which would ensue and accompany a retroactive cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind.”

As such, the petition was allowed with liberty to the Department to proceed against the Petitioner only after duly apprising it of the material on the basis of which that opinion under Section 29(2)(e) is formed.

Appearance: Mr. Rana Gurtej Singh, Adv. for Petitioner; Ms. Sushila Narang, Adv. for Respondent

Case title: JSD Traders LLP v. Additional Commissioner, GST

Citation: 2025 LiveLaw (Del) 302

Case no.: W.P.(C) 2608/2025

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