No Retrospective Cancellation of GST Registration of Deceased Person Without Any Non-compliance on Record | HC

Case Details: R. Trading Co. v. Commissioner of Delhi Goods and Services Tax - [2024] 159 taxmann.com 267 (Delhi)

Judiciary and Counsel Details

• Sanjeev Sachdeva and Ravinder Dudeja, JJ.
• Rakesh Kumar, Subhash Chandra Gupta, Akul Mangla and Shailender Verma, Advs. for the Petitioner
• Ms. Shagufta H. Badwar, Ms. Samridhi Vats, Advs. and Rajeev Aggarwal, Additional Standing Counsel for the Respondent.

Facts of the Case

The assessee was registered under CGST Act, 2017 and he had passed away in April 2021. The GST authorities cancelled his GST registration retrospectively with effect from 1st July 2017 for non-filing of returns after his death. The legal heir of deceased assessee filed a writ petition to quash the show cause notice and the order cancelling the registration.

High Court Held

The Honorable High Court noted that the GST registration cannot be cancelled with retrospective effect mechanically and can be cancelled only if the proper officer deems it fit to do so. Moreover, such satisfaction can’t be subjective but must be based on some objective criteria. The court also noted that there was nothing on record to show that the deceased was not making the requisite compliances under the Act.

Therefore, the court modified the order and held that the registration shall now be treated as cancelled with effect from 13th April 2021 i.e., the date of the demise of the assessee. The Court also held that GST authorities were not precluded from taking any steps for recovery of any tax, penalty or interest that may be due in respect of the subject firm in accordance with law.