Tag: Cancellation of GST Registration

Assessment u/s. 62 for Non-Filing of GSTR-3B Returns – Delay in filing was due to Cancellation of Registration, hence Order u/s. 62 is withdrawn

In the case of:

Surya Sreebhavani Infrastructure (P.) Ltd. vs. Assistant Commissioner of State Tax [2026] 186 taxmann.com 483 (Andhra Pradesh)[06-05-2026]

Facts of the Case:

Orders for Best Judgment Assessment u/s. 62 was passed for non-filing of GSTR-3B returns for March (23rd May), April (14th June) and August 2024 (1st November).

It was observed that Returns have been filed with payment of Tax, Interest and Late Fee for March on 28th September, April on 29th Septmber, but there was a long delay for August 2024 (Filed on 7th July 2025), since the registration was cancelled w.e.f. 31st July 2024, and restored only on 26th June 2025.

Hon’ble High Court of Andhra Pradesh has held that:

“Section 62(2) of the Act, 2017, stipulates that any order of assessment passed under Section 62 of the Act, 2017, would be deemed to have been withdrawn upon necessary returns being filed by the registered person, along with payment of tax, interest and late fees. In the present case, the petitioner has taken the necessary steps.

However, the delay in the filing of the returns for the month of August-2024 has been explained and as such, the said delay requires to be condoned.”

Therefore, it was held that since the delay in filing was due to the Cancellation of registration, the Orders as stated above are deemed to be withdrawn.

Relevant Provisions:

Section 62(1) of the CGST Act, 2017, as amended:

Notwithstanding anything to the contrary contained in Section 73 (For Non-Fraud Cases) or Section 74 (For Fraud Cases) or section 74A (New combined Section w.e.f 1st November 2024], where a registered person fails to furnish the return under Section 39 (Monthly or Quarterly Returns) or Section 45 (Final Return), even after the service of a notice under Section 46 (Notice for default in filing returns), the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under Section 44 9Annual Returns) for furnishing of the annual return for the financial year to which the tax not paid relates.

Sub-section (2) states that:

Where the registered person furnishes a valid return within sixty days (thirty days prior to 1st October 2023) of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of Section 50  or for payment of late fee under Section 47 shall continue.

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)

Brief Facts:

  1. The Petitioner has applied for cancellation of GST registration w.e.f. 08-02-2021, being the date of closure of the business.
  2. The application was rejected vide an order.
  3. 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.
  4. 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.
  5. 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.

Findings:

  1. 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.
  2. 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.

Order:

  1. The Impugned Order canceling the GST registration be effective from 8-2-2021.
  2. 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.

Similar Decisions on this issue (Retrospective Cancellation of GST Registration):

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)

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

Citation:

Raj Enterprise Vs. Superintendent, Range 25 GST Division

W.P.(C) No. 15777 of 2023 – High Court of Delhi

[2024] 158 taxmann.com 143 (Delhi)

Brief Facts:

  1. Petitioner stopped carrying on the business and made an application for cancellation of registration on 19-10-2021. Upon certain queries remaining unanswered, the application was rejected on 30-11-2021.
  2. On 1-12-2021, another application was made requesting cancellation w.e.f. 15-11-2021.
  3. Petitioner also claimed that it has filed returns till 31-12-2021.
  4. The application was again rejected and SCN dated 10-8-2022 was issued proposing the cancel the registration for failure to furnish returns for a continuous period of 6 months.
  5. Petitioner did not respond. On 27-9-2022, an order was passed cancelling the registration w.e.f. 19-10-2020.

Findings:

Hon’ble High Court of Delhi has observed that:

  1. As per Section 29(2)(c), the registration may be canceled from any date including retrospective effect, but the same cannot be arbitrary or whimsical.
  2. In the present case, the sole ground for cancellation was non-filing of returns for 6 months. This would not be sufficient for cancellation of registration even for the period it was carrying business and filing returns.
  3. There is a necessity for the proper officer to apply his mind and pass the cancellation order based on some objective criteria.
  4. The present SCN also did not indicate that the petitioner’s registration was proposed to be cancelled with retrospective effect. Hence, the petitioner had no effective opportunity to contest the retrospective cancellation.
  5. The petitioner has stopped carrying on business only from 19-10-2021 and t is from that date that they have requested for cancellation.

Order:

The Impugned Order shall take effect from 31-12-2021, which is till the date the petitioner has filed the returns.

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

Citation:

Sanchit Jain Vs. Avato Ward -46 State Goods & Services Tax

W.P.(C) No. 16211 of 2023 (High Court of Delhi)

[2023] 157 taxmann.com 570 (Delhi)

Brief Facts:

  1. Proper officer has issued Show Cause Notice dated 06.06.2023, proposing to Cancel GST registration for failure to furnish GST Returns for a continuous period of 6 months and the registration of petitioner was suspended w.e.f. from the date of the SCN.
  2. Order was issued cancelling the GST registration w.e.f. 03.07.2017, without mentioning any reason for doing so, other than that they had not filed returns for 6 months.
  3. It was observed by Hon’ble High Court that:
    • The said reason (Not filing returns for continuous period of 6 months) does not warrant cancelling of GST Registration even during the period the petitioner has filed the returns.
    • As per Section 29(2) of CGST Act, cancellation of GST registration (including from retrospective date) may be made only when the circumstances as specified in the sub-section are satisfied. Cancellation with retrospective effect cannot be arbitrary.
    • The petitioner does not object to the cancellation of registration, but they contend that the same cannot be done with retrospective effect, as the same had a cascading effect on their customers to whom supplies have been made, as they cannot avail ITC.

Order:

It was held by the Hon’ble High Court that:

  1. The impugned Order to the extent it directs the cancellation of GST registration with retrospective effect, is set aside.
  2. The GST Registration of the petitioner stands canceled from the date of SCN, i.e., 06.06.2023.