GST Registration Cancellation Upheld: Voluntary Disclosure and Business Cessation Validate Tax Authority's Original Application

HC set aside the order rejecting GST registration cancellation and directed cancellation from the original application date. The court allowed registration cancellation while permitting tax authorities to pursue recovery actions. The petitioner's voluntary disclosure of discrepancies and cessation of business activities were key considerations in the court's decision to modify the original administrative order.

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Issues involved:
The issues involved in this case are the suspension and subsequent cancellation of GST registration based on allegations of fraud, willful misstatement, or suppression of facts under Section 29(2)(e) of the Central Goods and Services Tax Act, 2017.

Summary:
The petitioner challenged a show cause notice dated 10.11.2023 that suspended their GST registration. The petitioner had earlier applied for cancellation of registration on 23.02.2023 but received a rejection order on 10.11.2023 due to non-appearance for a hearing. Subsequently, a new show cause notice was issued on the same day seeking cancellation based on the same grounds of fraud or misstatement. The petitioner's registration was suspended on 10.11.2023. The petitioner claimed to have ceased business activities and voluntarily disclosed discrepancies in their return by depositing a sum of Rs. 7,50,107. The court set aside the order rejecting the cancellation application and instead cancelled the registration effective from the date of the initial cancellation request. The petitioner was directed to comply with Section 29 of the Act. The respondents were permitted to take further legal actions for tax recovery.

This judgment addressed the issues of procedural fairness in the cancellation of GST registration, the petitioner's voluntary disclosure of discrepancies, and the court's decision to cancel the registration from the date of the initial cancellation application.

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