Retrospective Cancellation of GST Registration without Proper Reason in SCN: Delhi HC orders Fresh Hearing

The Delhi High Court overturned the retrospective cancellation of GST registration for Visiontek Engineers, citing insufficient grounds in the Show Cause Notice (SCN). The court emphasized that cancellation with retrospective effect should only occur when justified by specific circumstances outlined in Section 29(2) of the Central Goods and Services Tax Act, 2017, and not merely due to non-filing of returns. Justices Sanjeev Sachdeva and Ravinder Dudeja observed that the SCN lacked clarity on reasons and procedural fairness, directing restoration of the registration. They mandated compliance with GST rules while allowing the tax authorities to pursue recovery actions under law, provided proper notice and a hearing are given prior to any retrospective cancellation proceedings.