The Delhi High Court held in a recent matter that an Application for the Cancellation of Goods and Services Tax (GST) Registration cannot be withheld by the Revenue Department on the basis of any impending assessment or recovery proceedings against the Applicant applying for cancellation.
The Writ Petition was filed by M/s Kundan Trading Company, an entity registered under the Central Goods and Services Tax Act, 2017/ Delhi Goods and Services Tax Act, 2017 (CGST Act/DGST Act) seeking an Order permitting the cancellation of the Petitioner company’s GST registration with effect from 14.04.2024.
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The Petitioner in the Application for cancellation dated 14.04.2024 contended that it has ceased all its business activities from 01.04.2024 and requested for a pre-dated cancellation. The cancellation application was met with a notice dated 13.05.2024 seeking the proper date of cancellation along with other specific materials such as balance sheet, P&L statement, stocks etc.
The Notice further required the Petitioner to file all their GST Returns and provide Identity proofs of the key members of the business along with their Principal Place of Business on or before 22.05.2024, failing which the application for cancellation of GST Registration would be rejected by the Department.
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The Division Bench of the Delhi High Court comprising Justice Vibhu Bakhru and Justice Sachin Datta in light of the material produced on record laid reference to the guidelines in Circular No. 69/43/2018-GST dated 26.10.2018 issued by the Central Board of Indirect Taxes and Customs.
The CBIC Circular affirms that cancellation of registration does not absolve the taxpayer from any of their statutory liabilities required to be fulfilled by them before or after the cancellation of GST registration.
The Circular further provides that the Applications for cancellation of GST Registration are to be received and processed by the Proper Officer within a period of 30 days from the date of filing of the application.
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In light of the observations, the Delhi High Court proceeded to direct the Respondent Principal Commissioner of Department of Trade & Taxes, Government of NCT of Delhi to consider the application for cancellation of GST Registration reaffirming that the cancellation may not be withheld by the Commissioner citing any impending assessment or recovery proceedings against the Applicant seeking cancellation.
Additionally, the Delhi High Court directed the Petitioner to furnish proper documentation regarding their address and other particulars in order to facilitate the cancellation of their GST registration.
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