2023 (3) TMI 679 - HC - GST

Cancellation of GST registration of petitioner - non-filing of GST returns - reason for seeking cancellation of the registration was disclosed as Discontinuance of business/Closure of business - HELD THAT - Since the petitioner s business was closed and he had applied for cancellation of his GST registration, he did not file his GST returns for the subsequent period. The respondents passed the impugned order dated 24.08.2022, cancelling the petitioner s registration with effect from 02.07.2017 - Notice in the present petition was issued on 10.02.2023. However, the respondents have not filed any response to this petition. Apparently, there is no reason why the petitioner s cancellation was effected with retrospective effect. It is also clear that the order rejecting the petitioner s application for cancellation of registration, is unsustainable as it discloses no reason. The show cause notice issued earlier to the petitioner is also cryptic and does not set out any particulars as to why the petitioner s application for registration was proposed to be rejected. The present petition is required to be allowed. The respondents are directed to cancel the petitioner s registration with effect from 31.07.2021, as requested by the petitioner.

Summary

Issues involved:
The issues involved in the judgment are the rejection of the petitioner's application for cancellation of GST registration and the subsequent cancellation of registration by the respondents.

Summary:

Issue 1: Rejection of Application for Cancellation of GST Registration
1. The petitioner sought cancellation of GST registration due to discontinuance of business.
2. The concerned authority was not satisfied with the application and requested payment of due tax, interest, and penalty.
3. The petitioner did not respond to the communication, leading to the rejection of the application without proper examination.
4. The rejection order lacked reasoning and was passed erroneously, as no reply was filed by the petitioner.

Issue 2: Cancellation of GST Registration
1. The petitioner's business closure led to non-filing of GST returns for subsequent periods.
2. A show-cause notice was issued for non-filing of returns for six continuous months.
3. Subsequently, the registration was cancelled with retrospective effect from 02.07.2017.
4. The cancellation was challenged in the petition, highlighting the lack of reasons for retrospective effect and the cryptic nature of the show-cause notice.
5. The court directed the respondents to cancel the registration from the requested date, i.e., 31.07.2021, clarifying that recovery measures can still be taken if due.

In conclusion, the court allowed the petition, directing the cancellation of the petitioner's GST registration from the requested date and clarifying the scope for recovery measures in accordance with the law.