2023 (9) TMI 1181 - HC - GST

GST Registration Cancellation Resolved: Business Closure Date Recognized, Future Investigations Preserved Under Rule Compliance

The HC addressed a GST registration cancellation dispute. The court directed GST registration cancellation from 31.03.2022, matching the petitioner's ... Cancellation of GST registration of petitioner with retrospective effect - failure to file tax returns for a continuous period of six months - Closure of business - HELD THAT:- Since it is the petitioner’s case that he had closed the business in Delhi with effect from 31.03.2022, the petitioner could not be expected to file any returns thereafter. Undisputedly, a tax payer is entitled to close his business and seek cancellation of the GST registration. The cancellation of the GST registration is not an issue, the issue relates to cancellation of the GST registration with retrospective effect - it is deemed apposite to direct that the cancellation of petitioner’s GST registration shall take effect from 31.03.2022. However, this would not preclude the concerned authorities from instituting any proceeding if it is found that the petitioner has violated any provisions of the Statute or is liable to pay any tax, interest or liability. Petition disposed off. Issues involved: The petition impugned an order cancelling GST registration with retrospective effect. The petitioner was aggrieved by the cancellation of GST registration with retrospective effect from 02.07.2017, despite applying for cancellation with effect from 31.03.2022.Details of the Judgment:Cancellation of GST Registration with Retrospective Effect: The petitioner, engaged in trading of rubber tyres under a sole proprietorship concern, closed the business in Delhi on 31.03.2022 and shifted to Dehradun. A show cause notice issued on 26.04.2022 was not responded to as the petitioner had shifted. Subsequently, a fresh notice was issued on 08.11.2022 for failure to file tax returns, leading to cancellation of GST registration with retrospective effect from 02.07.2017. The impugned order noted no tax was found due and payable by the petitioner.Applicability of Retrospective Cancellation: The petitioner argued that since the business was closed in Delhi on 31.03.2022, no returns were expected thereafter. It was emphasized that a taxpayer is entitled to close business and seek cancellation of GST registration. The main contention was the retrospective effect of the cancellation, not the cancellation itself.Court's Decision: The Court directed the cancellation of the petitioner's GST registration to take effect from 31.03.2022, aligning with the closure of business. However, authorities were not precluded from taking action if any violations or liabilities were found post-closure. The petition was disposed of accordingly, with pending applications also being resolved.