The Delhi High Court has directed the GST department to conduct a fresh inspection of a business premises before taking a decision on restoring its Goods and Services Tax (GST) registration, which had been cancelled with retrospective effect due to address verification discrepancies.
A division bench of Justice Prathiba M. Singh and Justice Shail Jain was hearing the plea against the October 4, 2024 order of the Appellate Authority that had refused to reinstate the registration. The firm’s GST registration was originally cancelled on April 9, 2024, effective from April 22, 2021, after authorities claimed the firm was not operating from the registered address.
Under the CGST Act, 2017, the tax authorities can cancel a GST registration if a business is found non-compliant with prescribed requirements, such as operating from an unregistered address or failing to file returns. Section 29(2) allows cancellation if the taxpayer is no longer conducting business from the declared place of business.
However, the retrospective cancellation of registration—dating back months or even years—can have severe implications. It invalidates the input tax credit (ITC) claimed by the business and its buyers during that period, potentially triggering large tax demands and penalties. Courts have repeatedly stressed that retrospective cancellation should be exercised cautiously and with proper justification, as it can disrupt business operations and supply chains.
Address verification is a key compliance requirement. Businesses must update their registered address on the GST portal using an amendment application under Section 28 read with Rule 19. Failure to do so often leads to cancellation proceedings, as seen in this case.
The petitioner argued that it had shifted premises but was unable to update the GST portal because the registration had already been cancelled. It claimed the cancellation had adversely impacted its business and sought a chance to present complete documentation to confirm its existence at the new address.
The Appellate Authority had previously held that the petitioner had failed to submit a complete rent agreement, proof of ownership, Aadhaar and PAN details of witnesses, geotagged photographs of the premises, and had not applied for a change in the registered address under Section 28 of the CGST Act, 2017.
The Court ordered a fresh inspection and directed that a final decision on the restoration of GST registration must be made within a month of the inspection.
Case Details
Case Title: M/S Sakshi Trading Company Versus Additional Commissioner, Appeal-I Central Tax, East And Anr
Case No.: W.P.(C) 1011/2025
Date: 25th July, 2025
Counsel For Petitioner: Harsh Chachra, Adv.
Counsel For Respondent: Piyush Beriwal
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