M/S Kundan Trading Company vs. Principal Commissioner Of Department Of Trade And Taxes, Government Of Nct Of Delhi
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The petitioner, M/s Kundan Trading Company, assails an order dated 18 September 2024, passed by the Principal Commissioner of the Department of Trade and Taxes, Government of NCT of Delhi. This order rejected the petitioner's application for voluntary cancellation of its Goods & Service Tax (GST) registration. The sole reason cited for rejection was that during a field visit, the firm was not found to be existing or functioning at the given address. The petitioner contends that this reason is irrelevant to a prayer for voluntary cancellation of registration.
Held
The Court held that the reason for rejecting the application for voluntary cancellation of GST registration – that the firm was not found functioning at its given address during a field visit – was irrelevant. The Court reasoned that if the respondents had allegations of non-compliance or the firm never functioning, the statute provided adequate powers to take appropriate action. Furthermore, the Court noted that cancellation of registration does not prevent the respondent from recovering outstanding tax dues. The Court found no justifiable ground for compelling the petitioner to continue its registration if it had chosen to discontinue business. Consequently, the order dated 18 September 2024 was quashed and set aside. The respondent was directed to pass formal orders on the petitioner's application for voluntary cancellation/surrender of GST registration, without prejudice to the respondent's right to pursue recovery of any taxes or penalties due in accordance with law.
Key Issues
1. Whether the finding that the firm was not found functioning at its given address is a relevant ground for rejecting an application for voluntary cancellation of GST registration, under the relevant provisions of the GST Act and Rules? The petitioner argued that the reason for rejection was irrelevant to the prayer for voluntary cancellation. They contended that if the respondents had allegations of the firm never having functioned or failing to comply with other statutory stipulations, the statute provided adequate powers to take appropriate action. The petitioner also argued that mere cancellation of registration does not preclude the respondent from recovering outstanding tax dues and that the respondents could not compel the petitioner to continue its registration if it chose to discontinue business. The respondent's arguments are not explicitly recorded in the judgment, beyond the fact that they passed the order rejecting the application based on the firm not being found functioning at the address.
Sections Cited
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Cause title — parties, addresses and appearances
O R D E R %
2025
The writ petitioner assails the order dated 18 September 2024 pursuant to which its application for voluntary cancellation of its Goods & Service Tax [“GST”] registration has come to be rejected. The solitary ground which appears to have weighed upon the respondent to reject that application was that at the time of a field visit, the firm was not found existing/functioning at the given address.
We fail to countenance how the same could have had any relevance to the prayer made for voluntary cancellation and surrender of GST registration. In case it was the allegation of the respondents that the firm had never functioned or had failed to comply with any other statutory stipulation, the statute clearly and adequately empowers them to take appropriate action.
Regard must also be had to the fact that mere cancellation of registration does not deprive the respondent of the right to demand and 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 01/07/2025 at 22:45:30
recover outstanding tax dues. Ultimately, if the petitioner had chosen to discontinue business, the respondents could not have, on any justifiable ground compelled it to continue with its registration. Accordingly, and for all the aforesaid reasons, we find ourselves unable to sustain the order dated 18 September 2024. 4. The writ petition is, consequently, allowed. The order dated 18 September 2024 is quashed and set aside. The respondent shall pass formal orders on the application of the petitioner for voluntary cancellation/surrender of GST registration.
The aforesaid action shall be without prejudice to the right of the respondent to adopt such other appropriate measures as permissible, including those pertaining to recovery of any taxes or penalties that may be due in accordance with law.
YASHWANT VARMA, J.
HARISH VAIDYANATHAN SHANKAR, J. MARCH 19, 2025/AK 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 01/07/2025 at 22:45:30
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.