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of <h1>GST Registration Cancellation Allowed Despite Prior Tax Liabilities, Proper Officer Can Pursue Separate Recovery Proceedings</h1> <h3>M/s. Sanjay Sales India Versus Principal Commissioner of Department of Trade And Taxes, Government of NCT of Delhi.</h3> The HC ruled in favor of the petitioner, mandating the respondent to process the GST registration cancellation application. The court clarified that ... Failure on the part of the respondent to process its application for cancellation of GST registration - reason for seeking cancellation of GST registration was that it had discontinued its business - requirement to submit details as to the tax paid along with stock register and bank statements etc. HELD THAT:- The first ground, “Cancellation Details – Others (Please specify) – Please pay due tax and penalties”, is untenable. The petitioner stated that its reason for seeking cancellation of GST registration was that it had discontinued its business. The cancellation of GST registration would not impinge upon the liability of the petitioner to pay the outstanding tax and penalties, if any. The second reason for proposing to reject the petitioner’s application dated 13.06.2024 appears to be a requirement to submit details as to the tax paid along with stock register and bank statements etc. This is also untenable in view of the settled law that the cancellation of the GST registration would not affect the petitioner’s liability to pay the taxes due or to be answerable for any statutory violation prior to the date of cancellation. The scrutiny as to the petitioner’s tax liability for a prior period cannot be a ground for refusing cancellation of GST registration - the respondent is directed to process the petitioner’s application for cancellation of GST registration. Petition disposed off. The petitioner filed a petition against the respondent for not processing its application for cancellation of GST registration. The court directed the respondent to process the cancellation application, stating that the petitioner's tax liability for a prior period cannot be a ground for refusal. The Proper Officer can still initiate proceedings for assessing liability or recovery of any amount due.
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