+91 8192005690 info@markbly.in
Free Consultation
MARK AND ASSOCIATES LLP MARK AND ASSOCIATES LLP CHARTERED ACCOUNTANT
GST

GST: Where assessee's GST registration was cancelled with retrospective effect for non-operation at registered premises and closing ITC was directed to be reversed, since registration was restored in separate proceedings, liability for reversal of ITC did

Published on 14 Apr 2026

HIGH COURT OF ANDHRA PRADESH

Hithaishi Infra Machine vs Assistant Commissioner ST FAC*

R RAGHUNANDAN RAO AND T.C.D. SEKHAR, JJ. WRIT PETITION NO. 27632 OF 2025

JANUARY 7, 2026

Registration - Cancellation of- Effect on liability - Restoration effect - Petitioner, registered under GST, received SCN for cancellation citing non-operation at principal place per registration - Petitioner did not respond and registration was cancelled with retrospective effect by 2nd respondent - Post cancellation, SCN proposed reversal of closing ITC under statutory provision on cancellation - 1st respondent assessed and confirmed reversal citing cancellation and non-filing of GSTR-10 - It was recorded that petitioner had not obtained new registration to transfer closing credit - Petitioner filed writ challenging reversal, asserting registration stood restored in separate proceedings - Issue was survival of reversal post- restoration - HELD : Impugned order rested on premise that cancellation subsisted and that petitioner had neither filed GSTR-10 nor obtained new registration to transfer credit - Since registration stood restored, obligation to reverse closing ITC did not arise - Impugned assessment was set aside and writ was allowed [Section 29, read with Section 30 of Central Goods and Services Tax Act, 2017/Andhra Pradesh Goods and Services Tax Act, 2017] [Para 5] [In favour of assessee]

CASES REFERRED TO

Hithaishi Infra Machine v. Superintendent of Central Tax [2025] 179 taxmann.com 306 (Andhra Pradesh) (para 4).

Anil Kumar Bezawada for the Petitioner. Santhi Chandra, Sr. Standing Counsel for the Respondent

ORDER
T.C.D. Sekhar, J.- The petitioner is a register dealer under the GST Act. The 2nd respondent issued show cause notice dated 24.08.2024 asking the petitioner to submit explanation as to why the GST registration of the petitioner shall not be cancelled on the ground that the petitioner is not conducting business at its principal place of business as per the registration certificate.

  • It is stated that the petitioner could not replied to the said show cause notice and thereafter the 2nd respondent by order dated 10.09.2024 cancelled the GST registration of the petitioner with effect from 16.07.2020. Thereafter, the petitioner was issued a show cause notice dt.13.02.2025, directing him to reverse the closing balance of input tax credit lying in its Electronic Credit Ledger amounting to Rs.22,68,580/- as per

Section 29(5) of the Act. Later, the 1st respondent passed assessment order dated 01.03.2025 confirming the demand for reversal of closing balance ITC as the registration of the petitioner itself was cancelled. Questioning the said order, the present writ petition is filed.

  • The counsel for the petitioner would contend that he would not give reply to the show cause notice inasmuch as its Accountant has left the petitioner's firm during April, 2024. He would further submit that in view of cancellation of the registration of the petitioner, it had no information with regard to the issuance of show cause notice being uploaded in the GSTN portal. Apart from the same the order under challenge was assailed on various other grounds including lack of DIN and signature.
  • During the course of hearing, the counsel for the petitioner would submit that questioning the cancellation of registration of the petitioner, a writ petition vide Hithaishi Infra Machine v. Superintendent of Central Tax [2025] 179 taxmann.com 306 (Andhra Pradesh)/WP No.26305 of 2025 was filed before this Court and the same was allowed by order dated 24.09.2025, consequently the registration of the petitioner's firm was restored. He would further submit that in view of the restoration of the petitioner's registration the question of reversal of closing balance of ITC does not arise and requested to set aside the order under challenge.
  • On perusal of the impugned order, it is evident that the same was passed on the ground that the petitioner has not filed Form-GSTR-10 or it obtained new GST registration to get transfer of such closing credit. As the petitioner has availed the said benefit of ITC amounting to Rs.22,68,580/-, it had to reverse the same in view of cancellation of registration. Since, the registration of the petitioner was restored in view of order dated 24.09.2025 in WP No.26305 of 2025 passed by this Court, the question of reversal of closing balance of ITC does not arise in the case on hand. In view of the same, the impugned order is set aside and the writ petition is allowed.
  • Needless to mention, this order will not preclude the respondents to initiate appropriate action against the petitioner in accordance with law.
  • Accordingly, the writ petition is allowed. There shall be no order as to costs. As a sequel, pending applications, if any shall stand closed.

■ ■

*In favour of assessee.

Source: taxmann.com