The Hon’ble Delhi High Court in Kamal Kindra v. Commissioner of State Tax & Ors. [W.P.(C) 9237/2025 & CM APPL. 39190/2025, order dated July 7, 2025] held that once the provisional registration was cancelled, the issuance of a subsequent show cause notice for non-filing of returns was untenable. The Court directed that GST registration be deemed cancelled from the date of application for cancellation.
Facts:
Kamal Kindra (“the Petitioner”), a sole proprietor operating under the name Shree Durga Automobiles, filed a writ petition against the Commissioner of State Tax & Ors. (“the Respondents”), who cancelled the GST registration retrospectively.
The Petitioner was carrying on business through a sole proprietorship registered under the CGST and DGST Acts. Upon closure of business in April 2019, the Petitioner applied for cancellation of GST registration on May 8, 2019. The provisional registration was cancelled by order dated June 9, 2020, but a fresh show cause notice dated July 22, 2021, was issued on grounds of non-filing of returns for the period of six months. Thereafter, by order dated August 4, 2021, the registration was cancelled retrospectively from July 1, 2017.
The Petitioner contended that the cancellation order dated June 9, 2020, was not served at the address provided in the application. Further, since the provisional registration had already been cancelled, the subsequent SCN was invalid. The appeal against cancellation was dismissed by the Appellate Authority as time-barred.
Issue:
Whether retrospective cancellation of GST registration from July 1, 2017, was sustainable when the business had closed in April 2019 and cancellation was applied for in May 2019?
Held:
The Hon’ble Delhi High Court in W.P.(C) 9237/2025 & CM APPL. 39190/2025 held as under:
- Observed that, the Petitioner had applied for cancellation of registration on May 8, 2019, and the order cancelling the provisional registration was issued on June 9, 2020.
- Noted that, the subsequent show cause notice issued on July 22, 2021, for non-filing of returns was untenable since the registration had already been cancelled on June 9, 2020.
- Held that, the order dated June 9, 2020, stands set aside and the Petitioner’s registration shall be treated as cancelled w.e.f. July 1, 2017, and directed that, the petition is disposed of accordingly along with all pending applications.
Our Comments:
The Delhi High Court’s decision reinforces that retrospective cancellation of registration must be rationally aligned with the actual date of cessation of business. The cancellation cannot extend beyond what is legally justifiable based on facts and procedural fairness.
In a similar vein, the Gujarat High Court in previously noted in Aggarwal Dyeing and Printing Works v. State of Gujarat [2022 (56) G.S.T.L. 145 (Guj.)] that retrospective cancellation from the date of registration should not be done mechanically.
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