The Punjab & Haryana High Court has quashed an order cancelling GST registration retrospectively on the ground that the taxpayer was not put to notice of such proposed action in the show cause notice.
The bench of Justice Deepak Sibal and Justice Lapita Banerji held that the action violates fundamental principles of natural justice. The Court emphasized that retrospective cancellation under Section 29 of the CGST Act is permissible only under specific contingencies. Any such action must be clearly proposed in the show cause notice. The notice must disclose the grounds and material relied upon for initiating such action.
The case involved DNC Infrastructure Private Limited, which challenged the retrospective cancellation of its GST registration by the tax authorities. The show cause notice dated 04.04.2022 did not indicate that the registration was proposed to be cancelled with retrospective effect. However, the impugned order dated 25.04.2022 proceeded to cancel the registration retrospectively without any prior indication or reasoning.
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The Court relied on its earlier judgment in Bansal Casting vs. Union of India, reiterating that an order cancelling registration with retrospective effect must contain explicit reasons and cannot be passed mechanically.
The Bench also referred to the landmark ruling of the Supreme Court of India in Oryx Fisheries Pvt. Ltd. vs. Union of India, which held that a show cause notice must be issued with an open mind and should clearly outline the allegations to enable the noticee to respond effectively.
Case Details
Case Title: DNC Infrastructure Private Limited Versus UOI
Citation: JURISHOUR-945-HC-2026(P&H)
Case No.: CWP- 11932-2026 (O&M)
Date: 21.04.2026
Counsel For Petitioner: Hrithik Chaudhary, Advocate
Counsel For Respondent: Ajay Kalra, Sr. Standing Counsel
