Chetan Garg v. Avato Ward 105 State Goods and Service Tax [2024]
Summary
The Delhi High Court held that the application for cancellation of GST registration cannot be rejected solely due to ongoing proceedings under Form GST DRC-01 as such proceeding is independent of cancellation proceedings. Further, any amounts that falls due because of such proceedings can be recovered regardless of the status of the GST registration.
Brief:
The petitioner applied for the cancellation of their GST registration on the ground that it has no intention to continue the business under the given GST number. A query was raised on the said cancellation application, and the petitioner duly responded to the said query. However, the application for cancellation was rejected due to the pendency of the proceedings under Form GST DRC-01.
The petitioner filed a writ petition against the rejection of cancellation application, contending that merely pendency of the Form GST DRC-01 cannot be a ground to decline the request of the taxpayer for cancellation of the GST Registration.
The High Court noted that Form GST DRC-01 proceedings are separate from GST registration cancellation proceedings and can proceed independent of the registration status. Further, any dues identified as a result of such proceeding could still be recovered regardless of the registration status.
Hence, the Court held that the ongoing proceedings in Form GST DRC-01 could not justify the refusal to cancel the GST registration. It therefore ordered that the petitioner's GST registration is to be cancelled effective from the date the application for cancellation was made.
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