2024 (9) TMI 756 - HC - GST

Rejection of petitioner's application for cancellation of GST registration - application rejected on the ground that the petitioner has availed Input Tax Credit (ITC) from certain suppliers that were found to be non-existent - HELD THAT - It is apparent from the above that the petitioner s request for seeking cancellation of its GST registration was withheld on account of certain proceedings initiated for the assessment of the petitioner s liability. 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 apposite to clarify 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 GST registration with retrospective effect, if there are reasons do so, notwithstanding that the taxpayer has requested for cancellation of its GST registration with effect from another date. The learned counsel for the respondent rightly points out that in cases where the tax prayer has been found to be non-existent, the said action may be warranted. It is considered apposite to direct the respondent to consider the petitioner s application 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. Petitioner's application for cancellation of GST registration rejected.
2. Applicability of cancellation of GST registration on statutory violations.
3. Proper officer's authority to pass orders for cancellation of GST registration.
4. Consideration of application for cancellation of GST registration.
5. Effect of cancellation of registration on taxpayer's liability.
6. Directing respondent to consider petitioner's application for cancellation of GST registration.

The judgment addresses the petitioner's application for cancellation of its GST registration, which was rejected due to availing Input Tax Credit (ITC) from non-existent suppliers. The petitioner had closed its business and reapplied for cancellation, fearing a similar outcome. The court noted that cancellation of registration does not absolve the taxpayer from prior statutory violations. The proper officer can pass orders for cancellation with retrospective effect, even if the taxpayer requests a future date. The court referenced a circular stating that cancellation does not affect liability for past actions. Consequently, the court directed the respondent to consider the cancellation application without being influenced by ongoing assessment or recovery proceedings. The petitioner was instructed to provide a future correspondence address to the proper officer. The petition was disposed of accordingly, and the pending application was also resolved.