Punjab & Haryana High Court Strikes Down Retrospective GST Registration Cancellation Absent SCN Mention

Background of the Case

In a significant ruling touching upon procedural fairness in GST administration, the Punjab and Haryana High Court adjudicated upon a writ petition filed by PS Enterprises, challenging the cancellation of its GST registration. The core grievance of the petitioner was that the cancellation order had been passed with retrospective effect, despite the Show Cause Notice (SCN) preceding it containing no reference whatsoever to any retrospective cancellation.

The case brings to the fore a crucial principle of natural justice — that an authority exercising quasi-judicial powers cannot travel beyond the four corners of the SCN when passing an order adverse to the assessee.

Facts of the Case

Chronology of Events

The following sequence of events is central to understanding the dispute:

  1. The GST registration of PS Enterprises was cancelled vide order dated 29.04.2026 (Annexure P-2), with the cancellation made effective retrospectively from 27.10.2023 — a gap of over two and a half years.
  2. Notably, the Show Cause Notice (SCN) was issued on 14.05.2026 (Annexure P-3) — a date that comes after the cancellation order itself, which independently raises serious procedural concerns.
  3. The SCN issued to the assessee made no mention of retrospective cancellation of the GST registration.
  4. The assessee filed a writ petition before the Punjab and Haryana High Court challenging both the impugned cancellation order and the SCN.

Critical Observation: The cancellation order (dated 29.04.2026) preceded the issuance of the SCN (dated 14.05.2026). This sequence itself reflects a fundamental breakdown in due process, as an order cannot precede the show cause notice that is supposed to form its legal basis.

Petitioner's Arguments

The counsel appearing for PS Enterprises advanced the following submissions before the Court:

  • The SCN issued on 14.05.2026 did not contain any reference or indication of retrospective cancellation of registration.

  • Since the impugned order traversed beyond the scope of the SCN by imposing retrospective cancellation, it was legally unsustainable.

  • Reliance was placed upon the Division Bench judgment of the Punjab and Haryana High Court in:

    M/s Bansal Casting, S.K. Enterprises vs. Union of India and Another and M/s Shree Ram Industries vs. State of Haryana and Another; 2026:PHHC:027747-DB

    It was submitted that the said precedent squarely governed the present factual matrix and mandated quashing of the impugned order.

Revenue's Stand

In a notable development, the learned counsel for the revenue did not dispute either: