In a recent ruling, the Delhi High Court directed Goods and Service Tax ( GST ) authorities to reconsider the application cancellation of the petitioner’s GST registration and held that cancellation cannot be withheld due to ongoing assessment proceedings.
In this case, the petitioner, Pihu Enterprises was registered under the Central Goods and Services Tax Act, 2017/ Delhi Goods and Services Tax Act, 2017 with effect from 16.10.2023. It was submitted by the petitioner that the business was closed down and an application was made dated 27.07.2024 for cancellation of its GST registration.
The proper officer rejected the above application by an order dated 06.08.2024 stating that the petitioner has availed Input Tax Credit (ITC) from certain suppliers that were found to be non-existent. The application was rejected stating that due to the ITC availed by the petitioner, it was required to pay tax to the government.
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Again the petitioner filed the application dated 28.08.2024 seeking cancellation of its GST registration with effect from the date of the application which is 28.08.2024, but it was rejected.
The bench observed that the cancellation of the taxpayer’s registration will not discharge the taxpayer from being held accountable for any statutory violations prior to the date of the cancellation.
The Delhi High Court bench directed the petitioner to consider the application for cancellation of GST registration as the cancellation cannot be withheld due to any assessment proceedings or any proceedings for recovery of any statutory dues from the taxpayers. The Delhi High Court bench consisting of Justice Vibhu Bakhru and Justice Sachin Datta, directed the petitioner to provide the proper officer with an address for future correspondence along with the necessary KYC documents.
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