Order Date – 20 September 2023

Parties: Krishna Traders Vs Commissioner of Central Goods and Service Tax Delhi North & Anr.

Facts –

• The Petitioner, Krishna Traders, has closed his business in Delhi with effect from 31.03.2022 and had, accordingly, applied for cancellation of the GST registration on 13.04.2022.
• A show cause notice dated 26.04.2022 was issued to furnish additional information in connection with his application for cancellation of the GST registration. No response was provided by the petitioner as the petitioner was shifted to Dehradun, he didn’t receive the said notice. The proper officer rejected the cancellation application.
• Later, a fresh show cause notice proposing to cancel the petitioner’s registration on account of failure to file tax returns for a continuous period of six months. The GST registration was cancelled with the retrospective effect from 02.07.2017.
• Being aggrieved, the petitioner filed the writ petition.

Issue –

• Whether the cancellation of GST registration with retrospective effect is proper and valid?

Order –

• The Divisional Bench of Hon’ble High Court observed that since the petitioner had closed the business in Delhi with effect from 31.03.2022, the petitioner could not be expected to file any returns thereafter. Undisputedly, a tax payer is entitled to close his business and seek cancellation of the GST registration.
• Further, it was found from the impugned order that no tax was found due and payable by the petitioner. Thus it was held that the cancellation of petitioner’s GST registration shall take effect from 31.03.2022.