Delhi HC: GSTIN Can’t be Cancelled If Not Filed GST Returns for Some Timeframe

The Delhi High Court ruled that GST registration could not get cancelled just because an assessee does not file returns for a certain duration. The Petitioner stopped the business on the father’s demise. The retrospective cancellation of the registration consequence in the rejection of the ITC for a particular duration.

Raghav Arora, the applicant contested the order in a petition in which the petition furnished by the Petitioner has been dismissed as of limitation. The applicant has furnished the petition impugning the order of cancellation of registration in which the applicant’s GST registration was cancelled retrospectively, the Petitioner also challenges Show Cause Notice on 14.08.2019.

Show Cause Notice issued to the petitioner to show cause as to why the registration cannot canceled for the reason that “As per the GSTI report, at the time of visit, the firm was discovered to be in-operative on 13.08.2019” The applicant has been filed by Sh. Raghav Arora, legal heir of Late Sh. Gopal Kishan Arora, who was the proprietor of M/s Hari Gopal Steel and was engaged in the business of tubes, pipes, and hollow profiles of cast iron. Under the Goods and Service Act, 2017 (‘the Act’) he was registered and claimed to have been filing GST returns regularly and making GST payments under the law.

The father of the applicant was diagnosed with Cerebral/Brain Atrophy and has been sick since November 2018. He said that his father did not visit the business premises regularly and did not make any sales post-November 2018 because of his illness which expired on 09.03.2021.

Respondent no. 1 passed the order retrospectively canceling the GST registration of the assessee after a gap of exceeding than 15 months. It was provided that there is no demand had been submitted through the expressed order however the Registration was cancelled retrospectively from 01.07.2017.

The applicant does not wish to hold on business and the business has been stopped due to the demise of the father of the applicant. He proposed that he is dissatisfied with the retrospective cancellation of the registration as the Input Tax Credit is being rejected for the stated period.

Both the Petitioners and the department want cancellation of the GST registration of the Petitioner, though, for a different reason, a division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja cited.

As the applicant does not wish to carry on business or continue the registration, the Court revised the impugned order to the limited extent that registration will now be deemed as cancelled from 14.08.2019 i.e., the date when the Show Cause Notice was issued.

It was clarified that Respondents are also not prevented from taking measures to recover any tax, penalty, or interest that might be due concerning the subject firm under law.

The petitioner was represented by Mr. Puneet Rai and no one has appeared for the Respondent.

Case Title	Raghav Arora Vs. GST Officer Ward 78
Citation	W.P.(C) 2154/2024 & CM APPL. 8940/2024
Date	30.09.2022
For the Petitioner	Mr. Puneet Rai, Advocate
For the Respondent	Appearance not given
Delhi High Court	Read Order