Chetan Garg vs. Avato Ward 105 State Goods And Service Tax And Ors
Original PDF →Facts
The petitioner, Chetan Garg, applied for the cancellation of his GST registration on September 20, 2023, seeking an effective date of September 1, 2023. He responded to a query raised on his application on October 31, 2023. However, his application was rejected on February 16, 2024. The petitioner then reapplied for cancellation on February 17, 2024. The respondents' opposition was based on Show Cause Notices/GST DRC-01 issued to the petitioner for financial years 2018-19 to 2023-24. The petitioner had filed returns up to January 2024.
Held
The Court held that proceedings under GST DRC-01 are independent of the proceedings for cancellation of GST registration and can continue irrespective of the cancellation status. The recovery of any amount found due can be made regardless of the registration status. Therefore, the mere pendency of DRC-01 proceedings cannot be a valid ground to decline a taxpayer's request for cancellation of GST registration. The Court directed that the petitioner's GST registration shall be treated as cancelled with effect from February 1, 2024. This cancellation is without prejudice to the proceedings initiated by the respondents via DRC-01 for the financial years 2018-19 to 2023-24 and the petitioner's defense thereto. The Court also noted that it would be open for the respondents to take further action, including retrospective cancellation, provided they issue a proper Show Cause Notice and grant an opportunity of hearing to the petitioner.
Key Issues
1. Whether the pendency of Show Cause Notices/GST DRC-01 proceedings for financial years 2018-19 to 2023-24 can be a ground to decline the petitioner's request for cancellation of GST registration, as per Section 29 of the Central Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the application for cancellation of GST registration was made because he no longer intended to carry on business under the GST number. He contended that the proceedings under DRC-01 are independent of the cancellation proceedings and can continue even after registration cancellation. Therefore, the pendency of DRC-01 should not be a reason to reject the cancellation request. Respondents' Contention: The respondents' opposition was solely based on the issuance of Show Cause Notices/GST DRC-01 to the petitioner for the financial years 2018-19 to 2023-24.
Sections Cited
Section 29
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT SANJEEV SACHDEVA, J. (ORAL)
Learned counsel for the Petitioner submits that the present residential address of the Petitioner is as under:- “House No. 330, second floor, Block-A-1, Janakpuri, A-3, West Delhi. 110058. Email: chetangarg2206@gmail.com”
Petitioner seeks a direction to the Respondents to cancel the GST Registration of the Petitioner.
Learned counsel for the Petitioner submits that Petitioner had applied for cancellation of the registration on 20.09.2023 to be W.P. (C) 4509/2024 effective from 01.09.2023. He submits that a query was raised on the said application and Petitioner had duly responded to the said query by response dated 31.10.2023. He submits that without considering the same, the application for cancellation was rejected on 16.02.2024. Thereafter, once again on 17.02.2024, Petitioner has applied for cancellation.
Issue notice. Notice is accepted by the learned counsel appearing for the Respondents. With the consent of the parties, petition is taken up for final disposal.
We noticed that petitioner had duly filed the returns for the period upto January, 2024. 6. As per Petitioner, Petitioner filed an application dated 31.10.2023 seeking cancellation of GST registration on the ground that Petitioner does not intend to carry on the business under the said GST number.
The only opposition on behalf of the Respondents appears to be with regard to certain Show Cause Notices/GST DRC-01 issued to the Petitioner for the financial years 2018-19 to financial year 2023-24. 8. The proceedings under DRC-01 are independent of the proceedings for cancellation of GST Registration and can continue despite cancellation of GST registration. The recovery of any amount found due can always be made irrespective of the status of the registration. Thus, merely pendency of the DRC-01 cannot be a W.P. (C) 4509/2024 ground to decline the request of the tax-payer for cancellation of the GST Registration.
In view of the above, we direct that the GST Registration of the Petitioner shall be treated to be cancelled with effect from 01.02.2024 i.e., the date from which Petitioner seeks cancellation of GST registration. Petitioner shall make all the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017 and it would be without prejudice to the proceedings initiated by the Respondents by issuance of DRC-01 for the financial year 2018-19 to financial year 2023-24 and the defence of the Petitioner thereto.
Petition along with pending application stands disposed of in the above terms.
It would be open to the Respondents to take further action, if so warranted, provided the Respondents to issue a proper Show Cause Notice and given an opportunity of hearing to the Petitioner even for any retrospective cancellation of the GST Registration of the Petitioner. SANJEEV SACHDEVA, J RAVINDER DUDEJA, J APRIL 05, 2024/sk
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.