The Rajasthan High Court has instructed the Bank of Baroda to unfreeze the applicant’s company account, allowing the company to use the account freely until a final decision is made regarding its representation. The court noted that the bank cannot freeze the account solely because the company’s GST registration was voluntarily cancelled.
The company, which engages in trading in goods on which no GST is imposed, has submitted a petition that the bench of Justice Nupur Bhati was hearing, and whose application for voluntary cancellation of GST registration was permitted by the related department.
After these cancellations, the applicant was notified via the respondent bank that accounts with cancelled GST registrations were acknowledged in the high-risk category, and therefore, the account of the applicant was frozen via the bank. The current petition was submitted against the same.
The applicant needs to submit a representation before the bank specifying its exemption from GST registration, and that in these situations, the account cannot be frozen, the court asked.
As per that, the respondent bank was asked to determine the specified representation within 10 days as per the statute via the way of a speaking order and permitted the applicant to make transactions from the account till the determination of the representation.
Voluntary Cancellation of GST Registration
Voluntary cancellation of GST registration implies that a registered taxpayer chooses to cancel their GST number even though the government has not made it mandatory to do so.
It takes place when a business suspends operations, changes its business model, converts to a different legal structure, or no longer needs GST registration because its annual turnover drops to the specified threshold limit. The taxpayer, by applying for voluntary cancellation, reports to the GST authorities that they do not desire to be registered and will no longer charge or collect GST on their supplies.
After cancellation of the GST registration, the taxpayer needs to submit all the due GST returns up to the date of cancellation and settle any outstanding tax obligations. The department may seek additional documents or perform verification before approving the cancellation request.
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The taxpayer, after approval, shall get an order validating the cancellation, and their GSIN shall become inactive. But keeping appropriate records for a few years stayed crucial since authorities can still perform audits or verifications of the duration when GST was active.
| Case Title | M/s. Bhilwara Trading Company vs. Bank Of Baroda |
| Case No. | No. 18322/2025 |
| For Petitioner | Mr. Naman Mohnot |
| Rajasthan High Court | Read Order |
