2024 (9) TMI 758 - HC - GST

Application for cancellation of GST registration - HELD THAT - It is well settled that cancellation of the taxpayer s registration does not absolve the taxpayer from being held accountable for any statutory violations prior to the date of the cancellation. It is also clarified that in certain cases, the proper officer may proceed to pass orders under Section 29 of the CGST Act and DGST Act for cancellation of the taxpayer s GST registration with retrospective effect, if there are reasons do so. It is considered apposite to direct the respondent to consider the application of the petitioner seeking cancellation of its GST registration bearing in mind that the cancellation ought not to be withheld on account of any assessment proceedings or any proceedings for recovery of any statutory dues from the taxpayers. It is so directed. Petition disposed off.

Summary

Issues:
1. Application for cancellation of GST registration.
2. Compliance with notice seeking information.
3. Consideration of cancellation application.
4. Effect of cancellation on statutory violations.
5. Circular on acceptance of cancellation applications.

Analysis:
The petitioner filed a petition requesting the respondent to cancel its GST registration effective from a specific date. The petitioner had been registered under the CGST Act and DGST Act and applied for cancellation due to business closure. The respondent issued a notice seeking clarification and documents related to the cancellation application, including financial statements, GST returns, and identity proofs. The petitioner responded with the required documents before the deadline. The court highlighted that cancellation of registration does not exempt the taxpayer from prior statutory violations and mentioned the possibility of retrospective cancellation under Sections 29 of the Acts. The respondent's counsel noted that action might be warranted if a taxpayer is found to be non-existent.

Additionally, a circular by the Central Board of Indirect Taxes and Customs clarified that cancellation of registration does not affect a taxpayer's liability for past or future actions. The circular outlined conditions for immediate acceptance of cancellation applications, emphasizing that cancellation should not be delayed due to assessment or recovery proceedings. In light of these considerations, the court directed the respondent to review the petitioner's cancellation application without withholding it due to ongoing proceedings. The court also instructed the petitioner to provide updated contact information and KYC documents for future correspondence. The petition was disposed of based on the aforementioned directions, and any pending applications were also resolved accordingly.