Responding to a Notice Proposing Cancellation

The notice usually arrives as an email saying that a document has been issued on the portal. By the time it is opened, the GSTIN may already show as “Suspended”. The business cannot issue a tax invoice. Its customers are asking why their credit has stopped matching. The reply is due in seven working days, or thirty days for some notices, and a cancellation order may follow within thirty days of the reply. This guide sets out the procedure, the forms and the documents involved.

The law is in section 29 of the CGST Act, discussed in Registration, and What Goes Wrong. The procedure is in rules 21, 21A and 22 of the CGST Rules. A person who applies to cancel follows a different route, described in Cancelling a Registration on Application.

The grounds the officer may rely on

Section 29(2) lets the proper officer cancel where:

• (a) the person has contravened provisions “as may be prescribed”;
• (b) a composition taxpayer has not furnished “the return for a financial year beyond three months from the due date”;
• © any other registered person has not furnished returns for “such continuous tax period as may be prescribed”;
• (d) a voluntary registrant “has not commenced business within six months from the date of registration”;
• (e) registration “has been obtained by means of fraud, wilful misstatement or suppression of facts”.

Rule 21 lists the prescribed cases. They are:

• no business conducted from the declared place of business;
• issuing an invoice or bill without supply;
• violating section 171 (anti-profiteering);
• violating rule 10A (bank account details);
• availing credit in breach of section 16;
• declaring more outward supplies in GSTR-1, as amended in GSTR-1A, than in the return under section 39;
• violating rule 86B;
• breaching the post-revocation return provisos of rule 23 (clause (ga)).

Clauses (h) and (i) set the return periods. For a monthly filer the period is “a continuous period of six months”. For a quarterly filer it is “a continuous period of two tax periods”.

The portal’s FAQ on suo moto cancellation lists some grounds that are not in section 29(2) or rule 21 as they now stand. One example is collecting tax and failing to pay it within three months. The Act and the rules govern.

Two notices: REG-17 and REG-31

The officer starts proceedings in one of two ways.

FORM GST REG-17 is the show cause notice under rule 22(1). The officer issues it where he “has reasons to believe” that the registration is liable to be cancelled under section 29. The form states the reasons, directs a reply “within seven working days from the date of service”, and fixes a date and time for a personal hearing. It warns that if the person neither replies nor appears, the case “will be decided ex parte on the basis of available records and on merits”. A note at the foot records any suspension: “Your registration stands suspended with effect from ---------- (date).”

FORM GST REG-31 is issued under rule 21A(2A). It is an “intimation for suspension and notice for cancellation”, sent on the portal or by email. It is used in three situations:

• returns compared with GSTR-1, GSTR-1A or suppliers’ outward supply details show “significant differences or anomalies”;
• the bank account has not been furnished as rule 10A requires;
• returns have not been filed for the periods in rule 21(h) or (i).

The last version was added to the form by Notification No. 20/2024-Central Tax. The person must explain “within a period of thirty days”. The form says that it is system-generated and unsigned.

The two notices differ in three ways:

• Time to reply: seven working days for REG-17, thirty days for REG-31.
• Suspension: rule 21A(2) says the officer “may” suspend when issuing REG-17. Rule 21A(2A) says the registration “shall be suspended” when REG-31 issues.
• Format: the reply to REG-17 is prescribed as FORM GST REG-18. The reply to REG-31 is an explanation to the jurisdictional officer, for which no form is prescribed.

Both routes end the same way. Rule 22(3) and (4) treat a reply to either notice alike.

What suspension does

Under rule 21A(2), the officer may suspend the registration “with effect from a date to be determined by him”. The portal’s FAQ says that for an officer-initiated case, the date is the date REG-17 is issued. Its manual adds that REG-17 may also be issued without suspension, leaving the status “Active”. REG-31 suspends “with effect from the date of this communication”.

During suspension:

• Invoicing stops. Under rule 21A(3), the person “shall not make any taxable supply”. The Explanation says this means not issuing a tax invoice and “accordingly, not charge tax on supplies made by him during the period of suspension”.
• Returns under section 39 are not required. The portal allows returns and invoice uploads only for periods before the suspension.
• No refund under section 54 is granted, by rule 21A(3A), for a suspension under sub-rule (2) or (2A).
• Core amendments are disabled. The portal still allows payments, appeals, replies to notices and non-core amendments.

Suspension ends when the proceedings conclude, and is then deemed revoked from the date it began (rule 21A(4)). The officer may also revoke it earlier. Two cases end it automatically, but only for a REG-31 suspension and only where the registration has not already been cancelled. Filing all pending returns ends a suspension for non-filing. Complying with rule 10A ends a suspension for missing bank details.

When a suspension is revoked, rule 21A(5) applies section 31(3)(a) and section 40 to supplies made during the suspension. Section 31(3)(a) allows revised invoices within one month, and section 40 governs how those supplies are declared in a return.

Viewing the notice

The portal’s manual places both the notice and the hearing date under Services > User Services > View Notices and Orders. The notice and any supporting documents uploaded by the officer are downloaded from there. The FAQ adds that the personal hearing date appears in the downloaded notice.

Filing the reply in REG-18

FORM GST REG-18 has seven items:

1. the reference number and date of the notice;
2. the GSTIN;
3. the legal name;
4. the trade name;
5. the “Reply to the notice”;
6. a “List of documents uploaded”;
7. a verification by the authorised signatory that the information is “true and correct” and that “nothing has been concealed therefrom”.

The portal’s FAQ gives the route as Services > Registration > Application for Filing Clarifications. The reasons the officer gave are displayed in the form, and the FAQ notes that the person “is required to submit his/her response to each of the cancellation reasons invoked by the tax officer”. The manual for that facility describes:

• searching by the notice reference number;
• entering the response, remarks and additional information;
• attaching supporting documents;
• verification, then submission with DSC or EVC.

It also notes that the portal rejects a blank upload and warns on an illegible one. It states no file-size limit for this facility.

For REG-31, the form asks the person to “submit a reply to the jurisdictional tax officer within thirty days”. Where the problem is non-filing, it asks the person to file the returns. Where it is the bank account, it asks the person to furnish valid details on the portal. The FAQ says that adding the bank account through a non-core amendment revokes the suspension automatically.

The hearing

The first proviso to section 29(2) states: “the proper officer shall not cancel the registration without giving the person an opportunity of being heard”. REG-17 itself fixes the hearing date.

Section 75(4), on hearings “where any adverse decision is contemplated”, is framed for persons “chargeable with tax or penalty” in proceedings to determine tax. For cancellation, the hearing requirement comes directly from section 29(2).

FORM GST REG-19 lists the possibilities: reply with hearing, reply without appearance, appearance without reply, or neither. A person may appear through an authorised representative under section 116.

Dropping the proceedings: REG-20

Rule 22(4) provides that where the reply “is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20”. This applies to a reply to REG-17 and to a reply to REG-31 alike.

The proviso covers non-filing cases, under section 29(2)(b) or ©. The person may, “instead of replying”, furnish “all the pending returns” and make “full payment of the tax dues along with applicable interest and late fee”. The officer “shall drop the proceedings”.

The portal’s FAQ says that where a system-generated notice was issued for non-filing, filing all due returns drops the proceedings automatically. If they are not dropped, an “INITIATE DROP PROCEEDING” button is available. Once proceedings are dropped, the GSTIN returns to “Active” and the order appears on the dashboard.

The text of REG-20 differs slightly from the rule. For a REG-31 non-filing case, the form refers to returns “which were due on the date of issue of the aforesaid notice” and to “self-assessed tax”. The rule 22(4) proviso, for REG-17, speaks of interest and late fee as well.

The order: REG-19, and its date

Under rule 22(3), the officer issues FORM GST REG-19 “within a period of thirty days from … the date of the reply to the show cause”. The order cancels the registration “with effect from a date to be determined by him”. It directs payment of arrears of tax, interest and penalty, including the section 29(5) amount on stock and capital goods. Rule 22(3) states no period for a case in which no reply is filed.

REG-19 sets out the reasons and states “The effective date of cancellation of your registration”. The portal’s FAQ adds that the status then changes to “Inactive”, and that returns for periods before the effective date can still be filed. Nothing can be filed for later periods.

Section 29(2) allows cancellation “from such date, including any retrospective date, as he may deem fit”. A retrospective date matters to customers, because credit on invoices issued after that date is put in question. The courts have set limits on that power, discussed below.

What the courts have required

The Delhi High Court has set aside or modified many orders on this point. Three of its Division Bench decisions show the line.

Aditya Polymers v Commissioner of Delhi Goods and Services Tax (Delhi High Court, W.P.© 14493/2022, 28 March 2023). A show cause notice for six months of non-filing was issued on 11 December 2020, and the registration was suspended that day. No reply was filed. The registration was cancelled from 1 July 2017, the date it had been granted, and an appeal failed as time-barred. The Court held that “selecting a date from which to cancel the registration cannot be arbitrary”. The person “must be put to notice of the proposed action to cancel the registration from a retrospective date”. The notice had not said so. With both sides agreeing, cancellation was made effective from the date of the notice.

Ramesh Chander v Assistant Commissioner of Goods and Service Tax, Dwarka Division (Delhi High Court, W.P.© 822/2024, 19 January 2024). The notice cited six months of non-filing but named no officer, place or time for the hearing. The order cancelled from 1 July 2017, gave no reasons, and contradicted itself: it referred to the reply yet said no reply had been filed. The Court held both the notice and the order “vitiated on account of lack of reason and clarity”. Registration cannot be cancelled with retrospective effect “mechanically”; the satisfaction “must be based on some objective criteria”. Non-filing for some period does not justify cancellation covering periods “when the returns were filed and the taxpayer was compliant”. The Court also held that the officer must consider the consequence for customers’ credit. The notice, order and appellate order were set aside and the registration was restored, subject to returns being filed. No penalty or fine for delayed filing was payable for the suspension period, on an affidavit that no business had been done in that time.

Riddhi Siddhi Enterprises v Commissioner of Goods and Services Tax (CGST), South Delhi (Delhi High Court, W.P.© 8061/2024, 25 September 2024). This case concerned fraud. The notice cited only section 29(2)(e). The order, fifteen days later, cancelled from 28 September 2017 and gave no reasons. The Court held that the order “must itself reflect the reasons” for retrospective effect. It said the power “can neither be robotic nor routinely applied unless circumstances so warrant”. The order was quashed, without prejudice to fresh proceedings.

These decisions do not hold that retrospective cancellation is unavailable. Ricon Enterprises v Commissioner of State Tax (Bombay High Court, Writ Petition (L) No. 20583 of 2026, 30 June 2026, corrected 20 July 2026) concerned a notice alleging that the person had suppressed the particulars of its place of business. The Court held that section 29(2) “categorically permits” a retrospective date, and declined to entertain a challenge to section 29(2) and rule 21(a). It noted that the person had been offered a reply and a hearing but had not replied, and that its plea “can very well be taken in the show cause reply”. The petition was dismissed and the questions of law were left open.

No Supreme Court ruling on the Delhi line was found. Read together, these cases treat the notice and the reply as the place where the effective date is proposed, contested and reasoned.

After the order

A REG-19 order leaves three things to deal with.

• Final return. Section 45 and rule 81 require GSTR-10 “within three months of the date of cancellation or date of order of cancellation, whichever is later”. With a retrospective date, the order date is the later one. GSTR-10 is covered in Cancelling a Registration on Application.
• Revocation. Because the cancellation is “on his own motion”, section 30 applies. FORM GST REG-21 is due within ninety days of service of the order. The Commissioner, or an officer he authorises, may extend this by up to one hundred and eighty days. Where the cancellation was for non-filing, the returns, tax, interest, penalty and late fee must be cleared first. See Getting a Cancelled Registration Back.
• Appeal. An appeal in FORM GST APL-01 lies under section 107 “within three months from the date on which the said decision or order is communicated”. The Appellate Authority may allow “a further period of one month” for sufficient cause. The pre-deposit under section 107(6) is computed on amounts “arising from the impugned order”. See Appeals and Pre-Deposit.

Section 29(3) keeps liability for periods before cancellation alive, whichever route is taken.

Documents filed with a reply

Document	Who provides it	Source
Notice reference number and date	Registered person	REG-18, item 1
Written reply answering each reason in the notice	Registered person	REG-18, item 5; portal FAQ
List of documents uploaded	Registered person	REG-18, item 6
ARNs of returns filed, and challans or ledger debits for tax, interest and late fee	Registered person	Rule 22(4) proviso sets the condition; the evidence is officer practice
Bank account details added by non-core amendment	Registered person	Rule 10A; REG-31; portal FAQ
Proof of the place of business (ownership, lease or rent agreement, electricity bill), for a rule 21(a) ground	Registered person	The kinds of document listed in REG-01; their use in a reply is officer practice
Reconciliation of GSTR-1 or GSTR-1A with GSTR-3B, with invoices and transport documents, for a REG-31 anomaly	Registered person	Rule 21A(2A) identifies the comparison; the documents are officer practice
Evidence that business has commenced, for a voluntary registrant	Registered person	Section 29(2)(d); officer practice
Authorisation for a representative at the hearing	Registered person	Section 116
Verification (“true and correct … nothing has been concealed”)	Authorised signatory	REG-18, item 7; DSC or EVC per portal manual

Neither rule 22 nor REG-18 prescribes an affidavit, consent or undertaking. The only declaration prescribed is the REG-18 verification. The affidavit in Ramesh Chander was a condition the Court set for relief from penalty for delayed filing, not a requirement of the rules.

Physical verification often lies behind a rule 21(a) notice. Rule 25(1) allows the officer to verify the place of business “after the grant of registration”. The report, “including photographs”, is uploaded in FORM GST REG-30 within fifteen working days of the visit. The portal’s FAQ on field visits says that if the officer is not satisfied with the report, he may re-initiate the visit “or initiate the cancellation”. The general position on REG-30 and geocoding is in Applying for GST Registration.

The forms

Form	Purpose
REG-17	Show cause notice for cancellation (rule 22(1))
REG-31	Intimation of suspension and notice for cancellation (rule 21A(2A))
REG-18	Reply to REG-17 (rule 22(2))
REG-20	Order dropping the proceedings (rule 22(4))
REG-19	Order of cancellation (rule 22(3))
REG-30	Field visit report (rule 25)
GSTR-10	Final return (section 45, rule 81)
REG-21	Application for revocation (rule 23)
APL-01	Appeal under section 107

The procedure in order

1. Open the notice under View Notices and Orders. Note whether it is REG-17 or REG-31, the reasons given, the hearing date and any suspension date.
2. Stop issuing tax invoices from the date of suspension.
3. For REG-17, compute seven working days from service. For REG-31, compute thirty days.
4. Where the ground is non-filing, file the pending returns and pay the tax, interest and late fee. Where it is the bank account, add it by non-core amendment.
5. Otherwise, file REG-18 (or the REG-31 reply), answering each reason with documents, and verify it by DSC or EVC.
6. Attend the hearing in person or through an authorised representative.
7. Receive REG-20 (proceedings dropped, suspension revoked) or REG-19 (cancellation, with an effective date and reasons).
8. After REG-19, file GSTR-10 within three months of the later of the effective date and the order date. Then either apply for revocation within ninety days of service, or appeal within three months of communication.

The next guide covers a cancellation applied for by the registered person that does not go as planned: queries, rejection, delay, and a retrospective date the applicant did not ask for.