Delhi HC: GST Reg. Cancellation Cannot Be Withheld Due to Pending Assessments or Recovery Proceedings

Delhi High Court ruled that the revenue department could not accept an application for the cancellation of GST registration on the grounds of any impending assessment or recovery proceedings against the applicant who applied for the cancellation.

The Writ Petition was filed via 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) pursuing an Order allowing the cancellation of the Petitioner company‘s GST registration w.e.f 14.04.2024.

It was argued by the applicant in the application for cancellation on 14.04.2024, that it ceased all its business operations from 01.04.2024 and urged a pre-dated cancellation. The application for cancellation received a notice on May 13, 2024, requesting the correct cancellation date along with additional documents like the balance sheet, profit and loss statement, and stocks.

The Notice additionally mandated that the Petitioner submit all their GST Returns and the identity proofs of the key business members, along with their Principal Place of Business, by 22.05.2024. Otherwise, the Department would deny the application for cancellation of GST Registration.

The Division Bench of the Delhi High Court Justice Vibhu Bakhru and Justice Sachin Datta in light of the material produced on record laid regard to the guidelines in Circular No. 69/43/2018-GST on 26.10.2018 issued by the Central Board of Indirect Taxes and Customs.

CBIC circular affirms that the registration cancellation does not absolve the assessee from any of their legal obligations needed to get me through them before or after the GST registration cancellation. The circular additionally furnishes that the applications for the GST registration cancellation are to be obtained and processed via the proper officer within 30 days from the filing application date.

Furthermore, the Delhi High Court instructed the Petitioner to provide adequate documentation concerning their address and other details to assist in the cancellation of their GST registration.