The Delhi High Court has held that merely the pendency of DRC-01 cannot be a ground to decline the request of the taxpayer for cancellation of Goods and Service Tax (GST) registration. The Court directed that the GST Registration of the Petitioner shall be treated to be cancelled with effect from 01.02.2024 i.e., the date from which Petitioner seeks cancellation of GST registration.
Chetan Garg, the Petitioner sought to direct the Respondents to cancel the GST Registration of the Petitioner. Counsel for the Petitioner submitted that the Petitioner had applied for cancellation of the registration on 20.09.2023 to be effective from 01.09.2023. He submitted that a query was raised on the said application and Petitioner had duly responded to the said query by response dated 31.10.2023.
It was argued that without considering the same, the application for cancellation was rejected on 16.02.2024. Thereafter, once again on 17.02.2024, Petitioner applied for cancellation.
The only opposition on behalf of the Respondents appears to be about certain Show Cause Notices/GST DRC-01 issued to the Petitioner for the financial years 2018-19 to the financial year 2023-24. The proceedings under DRC-01 are independent of the proceedings for cancellation of GST Registration and can continue despite the cancellation of GST registration. The recovery of any amount found due can always be made irrespective of the status of the registration.
A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that merely the pendency of the DRC-01 cannot be a ground to decline the request of the tax-payer for cancellation of the GST Registration.
The Court directed that the GST Registration of the Petitioner shall be treated to be cancelled with effect from 01.02.2024 i.e., the date from which Petitioner seeks cancellation of GST registration.
Further held that the Petitioner shall make all the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017 and it would be without prejudice to the proceedings initiated by the Respondents by the issuance of DRC-01 for the financial year 2018-19 to the financial year 2023-24.
Mr Anurag Rajput, Mr Sahil Puri, Mr Sahib Rajput & Mr Dhruv Bhardwaj appeared for the petitioner. Mr Rajeev Aggarwal with Mr Prateek Badhwar, Ms Shaguftha H. Badhwar & Ms Samridhi Vats appeared for the respondent.
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