Registration to be Treated as Cancelled From Date of First Application Since Assessee Didn’t Want to Continue Business | HC

Case Details: Asian Traders v. Principal Commissioner of Department of Trade and Taxes - [2024] 162 taxmann.com 171 (Delhi)

Judiciary and Counsel Details

• • Sanjeev Sachdeva & Ravinder Dudeja, JJ.
  • Pranay Jain, Adv. for the Petitioner.
  • Rajeev Aggarwal, ASC & Ms Samridhi Vats, Adv. for the Respondent.

Facts of the Case

The petitioner was engaged in the business of trading of polymers and ethylene. It filed application for cancellation of GST registration on 30.05.2023 on the ground of closure of business. However, the said application was rejected by an order dated 07.12.2023. Thereafter, it again applied for cancellation of the GST registration on 14.12.2023 on the ground of closure of business and the said application was also rejected.

It filed writ petition against the rejection of application and contended that the application was rejected by merely mentioning that it was rejected in accordance with the provisions of the CGST Act since reply wasn’t satisfactory and order did not give any particulars or details.

High Court Held

The Honorable High Court noted that the department did not give any specific reasons for rejection. The mere cancellation of registration does not preclude the department from taking any action in accordance with law for recovery of any tax, penalty or fine that may be due.

In the instant case, no such ground was taken by department. Therefore, it was held that the registration of petitioner was to be treated as cancelled with effect from 30.05.2023 i.e., date when petitioner first filed application seeking cancellation of GST registration and the department was not precluded from taking any steps for recovery of any tax, penalty or interest that may be due.