HC Upholds GST Registration Cancellation for Fake Invoicing

Case Details : M.N. Trading Co. vs. Union of India - [2025] 178 taxmann.com 469 (Bombay)

Judiciary and Counsel Details

• M.S. Sonak & Advait M. Sethna, JJ.
• Rahul C. Thakar and C.B. Thakar for the Petitioner.
• Saket Ketkar for the Respondent.

Facts of the Case

The petitioner-assessee challenged the order cancelling its registration under Section 29 of CGST/Maharashtra GST Act, alleging breach of natural justice. It was submitted that the show cause notice did not propose retrospective cancellation, yet the impugned order cancelled the registration with retrospective effect. The show cause notice had alleged that the assessee had issued invoices or bills without any backing supplies, resulting in wrongful availment or utilisation of input for the refund of tax. The assessee did not file a reply to the show-cause notice. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the show cause notice had provided the assessee with a clear idea of the grounds for cancellation, namely, issuance of invoices or bills without supply of goods or services. Since the assessee did not contest the show cause notice by filing a reply and had virtually accepted the serious allegations, it could not complain of any technical breach of natural justice. The Court observed that arguments based on an alleged failure of natural justice were not tenable. Consequently, the order cancelling the registration was upheld.

List of Cases referred to

• Aditya Polymers v. Commissioner of Delhi GST [2023] 150 taxmann.com 223/98 GST 312/74 GSTL 192 (Delhi) (para 5),
• Oil & Natural Gas Corporation Ltd. v Gujarat Energy Transmission Corporation Ltd. (2017) 5 SCC 42 (para 14),
• Abhyudaya Co-operative Bank Ltd. v. Union of India 2021 SCC OnLine Bom 6126 (para 14)
• Suhrid Geigy Ltd. v. Commissioner of Surtax [1998] 150 CTR 424/[1999] 237 ITR 834/107 Taxman 347 (Gujarat) (para 23).