Chetan Garg Vs Avato Ward 105 State Goods And Service Tax And Ors (Delhi High Court)
The Delhi High Court, in the case of Chetan Garg vs. Avato Ward 105 State Goods and Service Tax and Ors, recently delivered a significant verdict regarding the cancellation of GST registration. The court’s decision underscores the importance of considering all factors before rejecting a taxpayer’s request for cancellation.
The petitioner, Chetan Garg, sought the cancellation of his GST registration, citing his intention to discontinue business operations under the registered GST number. Despite filing returns until January 2024 and responding to queries regarding his cancellation application, the petitioner faced rejection twice, on 16th February 2024 and subsequently on 17th February 2024.
The respondents opposed the cancellation primarily due to pending Show Cause Notices/GST DRC-01 issued against the petitioner for the financial years 2018-19 to 2023-24. However, the court clarified that the proceedings under DRC-01 are independent of the cancellation process. It emphasized that the mere pendency of DRC-01 cannot be a valid reason to deny the taxpayer’s request for cancellation of GST registration.
The court, taking into account the petitioner’s compliance with Section 29 of the Central Goods and Services Tax Act, 2017, directed the cancellation of the petitioner’s GST registration, effective from 1st February 2024. Importantly, this cancellation does not affect the ongoing proceedings initiated by the respondents through the issuance of DRC-01 for the specified financial years.
