GST Registration Cancellation Allowed Despite Pending Recovery Proceedings Under Section 29 of CGST Act

HC ruled in favor of petitioner's GST registration cancellation. The court determined that pending recovery proceedings (DRC-01) cannot obstruct registration cancellation. The registration was ordered cancelled effective from petitioner's requested date, subject to compliance with CGST Act, Section 29. Respondents were permitted to pursue retrospective cancellation after issuing proper show cause notice and providing hearing opportunity.

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Issues:
The judgment deals with a petition seeking cancellation of GST registration and the opposition by the respondents based on Show Cause Notices issued to the petitioner.

Cancellation of GST Registration:
The petitioner had applied for cancellation of GST registration, which was initially rejected without considering the petitioner's response to a query. The petitioner reapplied for cancellation, stating the intention to cease business under the GST number. The court noted that the proceedings under DRC-01 for recovery of dues are separate from the cancellation process. The pendency of DRC-01 cannot be a reason to deny cancellation of GST registration. The court directed the cancellation of the petitioner's GST registration effective from the date requested by the petitioner, subject to compliance with necessary requirements under Section 29 of the Central Goods and Services Tax Act, 2017.

Disposition and Further Action:
The petition, along with the pending application, was disposed of with the directive for cancellation of GST registration. The respondents were allowed to take further action, including retrospective cancellation, provided they issue a proper Show Cause Notice and grant the petitioner an opportunity for a hearing.

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