The petitioner challenged cancellation of GST registration on the ground of violation of Rule 86B for excess utilisation of ITC. The factual background showed that tax liability was discharged using electronic credit ledger and no revenue loss was caused to the department.
The Court held that cancellation of registration is a drastic measure and should be resorted to only in serious cases. Mere violation of Rule 86B, without revenue loss or fraudulent intent, was held insufficient to justify cancellation. The cancellation order was set aside.