HC Directs GST Authorities to Process Cancellation Application Without Holding It Up for Assessment of Tax

Case Details: B.R. Enterprises v. Principal Commissioner of Goods and Service Tax - [2024] 165 taxmann.com 443 (Delhi)

Judiciary and Counsel Details

• Vibhu Bakhru & Sachin Datta, JJ.
• Pranay Jain & Karan Singh, Advs. for the Petitioner.
• Aakarsh Srivastava & Vaibhav Gupta, Advs. for the Respondent.

Facts of the Case

The petitioner was carrying on trading in polymers and propylene. It ceased to carry on the said business and applied for cancellation of its GST registration. However, the proper officer issued a notice seeking additional information including tax reconciliations and thereafter rejected the application for cancellation. Thereafter, the proper officer suspended the petitioner’s GST registration for failure on the part of the petitioner to file its returns for a continuous period of six months.

It filed writ petition and contended that since its application for cancellation of the GST registration was rejected, the petitioner was compelled to file ‘Nil’ returns to comply with the statutory provisions.

High Court Held

The Honorable High Court noted that the cancellation of GST registration cannot be withheld on grounds of pending tax assessment or scrutiny. The Court also noted that the cancellation of registration does not preclude future proceedings for recovery of dues or non-compliance. Therefore, the Court directed the tax authorities to process cancellation application expeditiously without holding it up for assessment of tax, interest or penalties.