SCN Not Tenable After Provisional GST Cancellation
A Show Cause Notice (SCN) is not tenable for non-filing of returns after the cancellation of provisional GST registration.
Let’s understand the legal position, relief available, and what taxpayers should do in such cases.
What Is Provisional GST Registration?
When GST was rolled out on 1 July 2017, many businesses were auto-migrated based on VAT, Service Tax, or Excise registrations. These were given Provisional IDs and a Provisional Registration Certificate (GST REG-25).
To convert this into final registration, the taxpayer had to:
- Submit required documents
- File Form GST REG-26 within the prescribed deadline
Why SCN Is Not Tenable Post-Cancellation
- File GSTR-1 or GSTR-3B
- Comply with ongoing GST obligations
- Face penalties for non-compliance
Legal Basis
Under Rule 24(4) of the CGST Rules, 2017, if a migrated taxpayer fails to furnish necessary documents, the provisional registration is deemed cancelled.
Key Court Rulings on SCN Not Tenable
1. Delhi High Court – Krishna Fashion (2023)
- Held: Demand notice is not sustainable as no liability arises after cancellation.
2. Allahabad High Court – M/s Elegant Sales
- Held: Entire SCN and demand order set aside.
Legal Insight: Without a valid registration, there’s no taxable person under law — hence no SCN or demand can be raised.
What Should Taxpayers Do?
If you receive a demand notice or SCN in such cases:
- Check cancellation date of provisional registration
- File reply under Rule 142(1A) citing Rule 24(4) and relevant case laws
- Seek legal remedy through writ petition if the department proceeds further
Expert Tip: Don’t Ignore GST Migration Status
Many businesses still show cancelled provisional registration on the GST portal without converting or surrendering. This can trigger automated notices.
🛠️ Efiletax Suggests:
- Log in to the GST portal and check your registration history
- File REG-29 for cancellation if mistakenly activated again
- Reply to SCNs using legal templates and HC judgments
FAQ – SCN After Cancellation of Provisional GST
Q1. Can the department issue SCN if I never filed any GST return?
No, if your provisional registration was cancelled before any compliance obligation began, SCN is not valid.
Q2. What if I got cancelled but still received a DRC-01?
You can file a detailed reply citing Rule 24(4) and request dropping of proceedings.
Q3. Will this affect my future GST registration?
Cancelled provisional IDs have no bearing.
Final Word
SCN not tenable for non-filing of returns after cancellation of provisional GST registration is now a settled legal position.
Need help drafting replies or handling GST SCNs?
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Summary
A Show Cause Notice (SCN) is not tenable for non-filing of returns after cancellation of provisional GST registration.