GST registration cancellation cannot be denied on alleged dues or prior-period record demands where business has ceased.

GST registration cancellation cannot be refused merely because outstanding tax, penalties or prior-period liabilities are alleged, since any such liability survives independently of cancellation. A demand for stock, invoice, bank-statement or similar records to scrutinise prior-period tax issues is not a valid ground to deny cancellation where the business has been discontinued. The refusal grounds were therefore untenable, and the application for cancellation of GST registration had to be processed.

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Issues: Whether the petitioner's application for cancellation of GST registration could be refused on the ground of alleged outstanding tax and penalties or on the basis of a demand for prior-period tax, stock, invoice, bank-statement and related details.

Analysis: The cancellation of registration was sought on the basis that the petitioner had discontinued its business. The reasons cited in the notice did not justify refusal of cancellation because the liability, if any, to pay tax, penalties or other dues would survive independently of cancellation. Scrutiny of prior-period tax liability, or a requirement to furnish detailed records for that purpose, could not be treated as a valid ground to decline cancellation of GST registration.

Conclusion: The refusal grounds were untenable, and the respondent was directed to process the application for cancellation of GST registration.

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