Order Date – 28 March 2023 

Parties: Aditya Polymers Through its Proprietor Mr. Shweta Bhatia Vs Commissioner of Delhi Goods and Services Tax and Others 

Facts – 

• The Petitioner, Aditya Polymers, was served with a show cause notice dated 11.12.2020, proposing to cancel the registration on the ground that she had not filed her returns for a continuous period of six months. The respondents also suspended the petitioner’s registration with effect from the said date. 
• By an order dated 15.07.2021 the petitioner’s GST registration was cancelled with effect from the date on which it was granted, that is 01.07.2017 as the petitioner didn’t respond to the show cause notice. 
• The petitioner did not file any application seeking revocation of cancellation but proceeded to appeal the order dated 15.07.2021 cancelling the petitioner’s registration before the Appellate Authority. The same was rejected on the ground that it was filed beyond the period as stipulated under Section 107(1) of the CGST Act. 

Issue – 

• Whether the cancellation of GST registration is in order? 

Order – 

• The Divisional Bench of Hon’ble High Court observed that in terms of Section 29(2) of the CGST Act, the proper officer is empowered to cancel the registration from any such date as he may deem fit including from any retrospective date. However, selecting a date from which to cancel the registration cannot be arbitrary. It is essential that the exercise of powers to cancel the registration ab initio, must be based on material on record and some rationale. 
• In the present case, the show cause notice issued to the petitioner did not mention that the proper officer proposed to cancel the registration with retrospective effect. Thus, the petitioner had no opportunity to address any proposed action of cancellation of registration ab initio. 
• Hence the present petition is disposed of with the direction that the cancellation of the petitioner’s GST registration would take effect from 11.12.2020 and not from 01.07.2017.