Cancellation of GST Registration due to Closing Down of Business: Delhi HC Modifies Cancellation Order [Read Order]

The Delhi High Court modified the order of cancellation to the extent that the same shall operate with effect from 23.02.2023, i.e., the date on which the petitioner made an application for cancellation of Goods and Services Tax( GST ) registration and the registration was suspended. The petitioner assessee sought the cancellation due to the closing down of the business.

M/S Sri Krishan Traders, the petitioner sought to direct the respondent to cancel the GST registration of the petitioner with effect from 22.03.2023. Counsel for the respondent points out that the concerned Commissionerate is the Commissionerate of West Delhi.  Learned counsel for the petitioner prays for leave to amend the memo of parties. Mr. Anurag Ojha, Standing Counsel appeared on behalf of the newly added respondent. 

 The petitioner had submitted an application seeking cancellation on 23.02.2023 as the petitioner had closed down his business.  A notice was issued by the respondent on 04.12.2023, requiring the petitioner to furnish returns in terms of Section 29 of the Central Goods and Services Tax Act, 2017 and Rule 20 of the Central Goods and Services Tax Act, 2017.  

The Said application had been rejected by an order stating “neither the party appeared for PH on given time and date nor submitted the required documents viz. possession document, reconciliation statement and ID proofs etc.”.  

A Show Cause Notice was issued to the petitioner for cancellation of the GST registration on the ground that the petitioner has failed to furnish the GST returns.  It is the case of the petitioner that the petitioner had made an application for cancellation of registration on 23.02.2023. Thereafter, the registration was suspended and as such petitioner could not file the returns.      

It was evident that the petitioner and the concerned Commissioner wanted the GST registration to be cancelled, though for different reasons.

A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja while allowing the petition, modified the order of cancellation to the extent that the same shall operate with effect from 23.02.2023, i.e., the date on which the petitioner made an application for cancellation of registration and the registration was suspended.    

The petitioner shall furnish all requisite details to the respondents as required to be submitted by the petitioner by letter dated 04.12.2023 to enable the Respondents to ascertain if any demand is liable to be raised against the Petitioner.  It was clarified that the respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the petitioner in accordance with law. 

To Read the full text of the Order CLICK HERE

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