Cancellation of GST Registration to be effective from Closure of Business

Citation:

Shree Shyam Metals Vs. Commissioner of Goods & Service Tax

W.P.(C) No. 14120 of 2023 – High Court of Delhi

[2024] 158 taxmann.com 144 (Delhi)

The Petitioner has applied for cancellation of GST registration w.e.f. 08-02-2021, being the date of closure of the business.
The application was rejected vide an order.
The petitioner made another application dated 16-9-2021 requesting for cancellation w.e.f. 31-8-2021. GST authorities have issued a notice dated 27-9-2021 requiring further information.
Petitioner claimed that the said notice dated 31-8-2021 was not served on them and that the same is also beyond the stipulated period of time and not permissible.
Since there was no response to the notice dated 27-9-2021, the application was rejected vide an order dated 31-10-2021. Also, SCN was issued dated 29-9-2022, proposing cancellation stating that the petitioner was non-existent.

The Impugned Order does not indicate any reasons for cancellation with retrospective date w.e.f. 01-01-2019 and also that it did not mention that registration was proposed to be cancelled with retrospective date w.e.f. 01-01-2019. Hence, the petitioner was not provided an opportunity to contest the cancellation.
There is no material on record, to indicate that petitioner was non-existent as on 1-1-2019 or at any time prior to 8-2-2021.

The Impugned Order canceling the GST registration be effective from 8-2-2021.
However, in case the GST authorities seek to cancel from a date prior to 8-2-2021, SCN will be issued clearly setting out the reasons and pass on order as they deem fit after affording an opportunity of being heard to the petitioner.

Retrospective cancellation of GST cannot be made for Non-filing of returns for 6 months.

Retrospective cancellation of GST Registration cannot be made without satisfying Section 29(2)