GST registration cancellation cannot be stalled to assess liability; the application must be processed despite pending compliance issues.

Cancellation of GST registration cannot be withheld merely because the tax authority wishes to assess liability or because statutory compliance proceedings are pending. The taxpayer's liability and exposure to recovery action continue notwithstanding cancellation, so the cancellation application must be processed on its merits rather than kept in abeyance for that purpose. The position is consistent with the CBIC circular cited in the text. The petitioner was directed to furnish the required KYC documents and an address for future correspondence so that the cancellation request could be dealt with accordingly.

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Issues: Whether an application for cancellation of GST registration can be withheld or rejected on the ground of assessing the taxpayer's liability and pending statutory compliance.

Analysis: Cancellation of GST registration does not extinguish the taxpayer's liability or immunise it from action for statutory violations or recovery of dues. The authority cannot keep the cancellation application in abeyance merely to assess liability. The stated position is also supported by the CBIC circular clarifying the approach to be adopted in such matters.

Conclusion: The application for cancellation could not be withheld on the stated ground and was required to be processed, with the petitioner being directed to furnish the requisite KYC documents and an address for future correspondence.

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