GST Registration Cancellation cannot be Withheld due to Ongoing Assessment: Delhi HC

Pihu Enterprises Vs Principal Commissioner of Department of Trade And Taxes GNCTD (Delhi High Court)

In the case of Pihu Enterprises Vs Principal Commissioner of Department of Trade and Taxes, GNCTD, the Delhi High Court addressed the petitioner’s request to cancel its GST registration. Pihu Enterprises applied for GST cancellation after closing its business, but their initial application was rejected due to availing Input Tax Credit (ITC) from non-existent suppliers. The proper officer stated that the unpaid tax to the government required the petitioner to settle the ITC liability, leading to the rejection of the application. The court emphasized that a taxpayer’s GST cancellation request should not be withheld due to ongoing assessment or recovery proceedings. The court referred to a CBIC circular that clarified the cancellation process, stating that GST registration should be canceled promptly unless the application is incomplete or there is a merger or transfer of business. It further noted that cancellation does not exempt the taxpayer from liabilities for violations before the cancellation date. The court directed the proper officer to reconsider the petitioner’s application and ensure compliance with the cancellation process. All pending applications were disposed of accordingly.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT