GST registration cancellation allowed from October 2022, not retrospective to 2019, taxpayer liability remains unaffected

Delhi HC allowed petitioner's application for GST registration cancellation with effect from 01.10.2022 instead of the retrospective date of 29.11.2019. The court held that GST registration cancellation does not affect taxpayer's liability under relevant enactments or preclude authorities from initiating proceedings for statutory violations or recovery. Petitioner was directed to furnish address documents for future correspondence and KYC documents within two weeks to the proper officer's satisfaction before final cancellation approval.

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Issues:
Petitioner seeks cancellation of GST registration, rejection of various orders, ultra vires declaration of forms, retrospective cancellation, non-submission of required documents, rejection of revocation application.

Analysis:
The petitioner, a sole proprietorship trading concern, sought cancellation of its GST registration, which was rejected due to non-submission of necessary documents despite repeated notices. The rejection led to a subsequent show cause notice proposing cancellation on grounds of fraud, followed by retrospective cancellation. The petitioner then applied for revocation, which was also rejected due to non-compliance with document submission requirements.

The court noted that the cancellation of registration does not absolve the taxpayer from liabilities or preclude authorities from initiating proceedings for statutory violations or dues recovery. However, considering the petitioner had ceased business operations, the court directed the proper officer to reconsider the cancellation application from the requested date, subject to submission of required documents for future correspondence and KYC compliance.

The judgment emphasized that allowing the cancellation application does not exempt the petitioner from tax liabilities or statutory obligations. The authorities retain the right to pursue any pending issues or initiate proceedings for violations or recovery of dues. The court disposed of the petition with the directive for the proper officer to reassess the cancellation application upon fulfillment of document submission requirements within a specified timeframe.

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