2025-VIL-722-DEL
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SGST High Court Cases

GST - Voluntary Cancellation of Registration, Cancellation of Registration with Retrospective effect - Rule 21A(2A) CGST Rules, 2017 – On petitioner’s application for the cancellation of its GST registration, after a significant delay of over two years and four months, the tax authorities issued a clarification notice stipulated in Rule 21A(2A) of the CGST Rules. The petitioner's application was subsequently rejected - Show Cause Notice proposing cancellation on the grounds of non-filing of returns for a continuous period of six months. While the petitioner's appeal against the rejection of its voluntary cancellation application was pending, the authorities cancelled the registration with retrospective effect from 1st July 2017 - Whether the retrospective cancellation of the petitioner's GST registration from 1st July 2017 is valid when the petitioner had already applied for voluntary cancellation on 28th March 2022, and the SCN for cancellation was based on the failure to file returns after the said application had been made – HELD - The clarification on the petitioner's cancellation application was sought beyond the time period prescribed under Rule 21A of the CGST Rules – Further, the SCN for cancellation was flawed because it was based on the non-filing of returns. When the petitioner applied for cancellation of registration, there is no question of the Petitioner filing returns thereafter. Therefore, the very foundation of the SCN was invalid - the impugned order gave no reasons for resorting to a drastic retrospective cancellation dating back to 1st July 2017. In light of these procedural lapses and the untenable reasoning, the retrospective cancellation to be arbitrary - the cancellation of the petitioner's GST registration shall take effect from the date the application for cancellation was filed by the petitioner, i.e., 28th March 2022, and not from 1st July 2017 - The writ petition is disposed of
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