Delhi HC directs to cancel GST registration on date of application filed seeking cancellation of registration [Read Order]

In a recent case, the Delhi High Court directed the cancellation of Goods and Service Tax (GST) registration on the date of the application filed seeking cancellation of the registration. The writ petition was filed by the petitioner, Saroj Gagneja, challenging the order; the petitioner’s GST registration was canceled with retrospective effect. The petitioner was registered with the GST authority from 01.07.2017, conducting business as ‘M/s S. S. Enterprises,’ assigned a Goods and Service Tax Identification Number.

The petitioner discontinued the business in January 2020, filing an application on 17.01.2020, praying for the cancellation of her GST registration from that date. The respondent did not act on the request for over six months. On 19.07.2020, the GST department’s officer issued a notice seeking clarification on the cancellation application, to which the petitioner replied.

However, the respondent did not take immediate steps to cancel the petitioner’s GST registration. The application for cancellation was rejected on 20.09.2021, stating “DOCUMENTS NOT SHOW ON PORTAL.” After a show cause notice, the proper officer passed an order canceling the petitioner’s GST registration retrospectively from 01.07.2017, with no specified reason except mentioning the absence of a reply to the show cause notice.

During the court proceedings, Shreya Gagneja, counsel for the petitioner, argued that closing the business in January 2020, and not filing returns thereafter, should not be a ground for canceling the registration during the compliant business period. Additionally, the impugned order lacked reasons for canceling the GST registration and provided no explanation for the retrospective effect.

The bench observed that not filing returns after closing the business in January 2020 should not be grounds for canceling the registration during the compliant business period. The petitioner’s GST registration should not be canceled, as suggested by the show cause notice. The order revoking the registration lacked justification and was subject to being set aside.

After analyzing the facts and arguments, a division bench of Justice Vibhu Bakru and Justice Amit Mahajan directed the cancellation of Goods and Service Tax (GST) registration on the date of the application seeking cancellation. Rajeev Aggarval appeared for the revenue.

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