Varun Kumar Arya Legal Heir Of Naresh Kumar Proprietor Of Dickon Sales Vs Commissioner of Delhi Goods And Service Tax & Anr (Delhi High Court)
In the case of Varun Kumar Arya, Legal Heir of Naresh Kumar, Proprietor of Dickon Sales Vs. Commissioner of Delhi Goods And Service Tax & Anr., the Delhi High Court addressed the cancellation of GST registration for the petitioner’s deceased father. The registration was retroactively canceled from the date of issuance, leading to denial of Input Tax Credit (ITC) to customers for the period when returns were filed. The petitioner argued that the GST registration was unjustly canceled for periods where returns were submitted, and that the cancellation notice was issued after his father’s death, leaving it unaddressed. The court found that while the CGST Act allows retrospective cancellation, it must be done with justified reasoning and cannot be arbitrary. Since the only reason for cancellation was non-filing of returns for six months, the court held that the registration should not be canceled for the periods during which returns were filed. The court modified the cancellation to be effective from the date of death, August 7, 2020, instead of April 5, 2018, but clarified that tax recovery proceedings for the period before the taxpayer’s death may still be initiated. The petition was disposed of with these directions.
