Tax Authorities Directed to Honor Appellate Order for Voluntary GSTIN Cancellation from Application Date, Not Retroactively

The HC allowed a writ petition directing tax authorities to comply with an earlier appellate order for voluntary GSTIN cancellation. The petitioner had requested cancellation due to health issues and business discontinuation, but authorities arbitrarily cancelled the registration retroactively from the original registration date. The Appellate Authority had previously ruled that the cancellation should be effective from the application date (March 4, 2020), recognizing the taxpayer's right to voluntarily discontinue business. The HC found the Appellate Authority's order conclusive and directed immediate compliance by the proper officer.

---

---

Issues:
1. Compliance with the order dated 5th April, 2021 for GSTIN cancellation.
2. Arbitrary cancellation of GSTIN by Respondent No.1.
3. Appeal against the rejection of cancellation application.
4. Discontinuation of business at the petitioner's volition.

Detailed Analysis:
1. The petitioner filed a writ petition seeking compliance with the order dated 5th April, 2021, directing Respondent No.1 to allow voluntary surrender of GSTIN from 4th March, 2020. The petitioner's GSTIN was cancelled arbitrarily by Respondent No.1 despite the order from Respondent No.2 to cancel it from the date of application for cancellation.

2. The petitioner's counsel argued that the GSTIN cancellation was requested due to deteriorating health for discontinuation of business. Respondent No.1 canceled the GSTIN suo-moto under Section 29(2) from the registration date, not considering the genuine request. Respondent No.2 set aside this cancellation and directed cancellation from the application date.

3. The petitioner appealed the initial cancellation, and Respondent No.2's order on 5th April, 2021, allowed the appeal, revoking the cancellation and directing cancellation from the application date. Respondent's counsel mentioned that no appeal was filed against the rejection of cancellation on 5th August, 2020.

4. The Appellate Authority's order clearly stated the taxpayer's right to discontinue business voluntarily. The order directed immediate cancellation of registration from the application date, emphasizing compliance by the proper officer. The High Court found the Appellate Authority's order conclusive, allowing the writ petition and directing Respondent No.1 to comply with the cancellation order from 5th April, 2021.

---