M/S Sunrise INDIA vs. Principal Commissioner Of Goods And Service Tax West Delhi
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The petitioner, M/s Sunrise India, sought cancellation of its GST registration, which commenced on 02.11.2023. The petitioner applied for cancellation on 02.07.2024. The proper officer, on 12.07.2024, issued a notice requesting additional information, including permanent address details and KYC of proprietor/partners/directors, stating dissatisfaction with the initial application. The petitioner did not respond to this notice. Consequently, the proper officer rejected the application on 25.07.2024, citing non-receipt of response and directing the petitioner to deposit government dues and file pending returns. The petitioner filed a fresh application on 31.07.2024, expressing readiness to provide the requested address and KYC details, but contended that filing returns should not be a ground for rejection as business had ceased.
Held
The Court held that the petitioner's application for cancellation of GST registration should be allowed, subject to compliance with certain conditions. The Court found that the petitioner's unequivocal statement of having stopped business operations was a significant factor. While the proper officer had rejected the application due to non-response to a query and pending returns, the Court directed the petitioner to provide their permanent address for future correspondence and upload the KYC details as required. The Court clarified that the cancellation of registration would not absolve the petitioner from statutory liabilities or preclude the respondent from initiating proceedings for any statutory violation or recovery of dues. The proper officer was directed to process the cancellation application with effect from 02.07.2024, provided the petitioner furnished the required details.
Key Issues
1. Whether the rejection of the petitioner's application for cancellation of GST registration was justified on the grounds of non-response to a query and pending returns, despite the petitioner ceasing business operations? (Question of law and fact, concerning Section 29 of the CGST Act, 2017 and relevant rules). Petitioner's arguments: The petitioner argued that they had ceased business operations and were willing to provide the requested permanent address and KYC details. They contended that filing pending returns should not be a ground for rejecting the cancellation application, as the business had stopped. They relied on the principle that cancellation should be allowed when business ceases. Respondent's arguments: The respondent did not explicitly record arguments in the judgment. However, their actions in issuing the notice and rejecting the application suggest reliance on the petitioner's failure to respond to the query and the requirement to clear government dues and file pending returns.
Sections Cited
Section 29
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 05.08.2024
Issue notice.
Learned counsel for the respondent accepts notice.
The petitioner has filed the present petition, inter alia, praying that directions be issued to the respondent to cancel his Goods and Services Tax (GST) registration. The petitioner was registered under the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act) with effect from 02.11.2023 and was assigned Goods and Services Tax Identification Number (GSTIN) 07CPJPN0189P1Z5. 4. The petitioner seeks cancellation of his GST registration with effect from 02.07.2024, in terms of its application dated 02.07.2024. 5. In response to the petitioner’s application, the proper officer had issued a notice dated 12.07.2024 seeking certain additional information/ This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/08/2024 at 11:41:18
clarification/ documents. In terms of the notice dated 12.07.2024, the proper officer had stated that he had examined the petitioner’s application and was not satisfied with the same for the reasons that included seeking details of the permanent address of the petitioner for future correspondence along with documentary evidence. In addition, the petitioner was also called upon to upload KYC details of the proprietor/all partners/all Directors.
The petitioner did not respond to the notice dated 12.07.2024 and consequently, the proper officer passed the impugned order dated 25.07.2024 rejecting the petitioner’s application and directing the petitioner to deposit government dues, if any, and file all pending returns on time.
The reasons to reject the petitioner’s application as stated in the order dated 25.07.2024 are set out below: “1 Response to query has not been received from taxpayer. Pls deposit govt. dues if any and file all pending returns on time, application is rejected.”
The petitioner once again applied for cancellation of his registration by filing an application dated 31.07.2024 seeking cancellation of his registration with effect from 02.07.2024. The petitioner apprehends that the said application will also be rejected in a similar manner.
The petitioner has no objection in furnishing his details of permanent address for future correspondence along with documentary evidence. The petitioner is also ready and willing to upload the KYC details of its proprietor. However, the petitioner submits that he has already filed the returns and, therefore, the same cannot be a ground for rejecting his application to cancel his GST registration.
Since, the petitioner has made an unequivocal statement that he had This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/08/2024 at 11:41:18
stopped carrying on his business, the application seeking cancellation of his GST registration is required to be allowed.
The petitioner shall provide his permanent address for future correspondence and also upload the KYC details, as required by the Proper Officer.
In so far as the liability to pay the tax or other dues is concerned, it is clarified that cancellation of the petitioner’s GST registration would not absolve the petitioner from complying with the statutory provisions. The respondent is not precluded, in any manner, from initiating proceedings for any statutory violation or for recovery of any dues.
Subject to the petitioner furnishing his details of future correspondence and KYC details, the Proper Officer shall process the petitioner’s application for cancellation of his GST registration with effect from 02.07.2024. 14. The petition is disposed of in the aforesaid terms.
Pending application also stands disposed of. VIBHU BAKHRU, J SACHIN DATTA, J AUGUST 05, 2024/cl This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/08/2024 at 11:41:18
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.