GST cancellation order quashed as notice issued post-cancellation was held untenable; registration cancelled effective from date of taxpayer’s own application

Case Details

Case Title: Kamal Kindra v. Commissioner of State Tax, Delhi & Ors.
Court: High Court of Delhi
Petition Number: W.P.(C) 9237/2025 & CM APPL. 39190/2025
Category of Dispute: GST Registration Cancellation
Date of Judgment: 07.07.2025
Relevant Sections: Article 226 of the Constitution of India; Section 29 of CGST Act, 2017; Section 29 of DGST Act, 2017

Facts (Paras 3–7)

The petitioner, a sole proprietor under Shree Durga Automobiles, was registered under CGST and DGST Acts. The business ceased operations in April 2019, and an application for cancellation of GST registration was filed on 8 May 2019. On 20 May 2020, the department sought additional information, and on 9 June 2020 the provisional registration was cancelled. However, a Show Cause Notice dated 22 July 2021 was later issued for non-filing of GST returns, leading to cancellation of registration retrospectively from 1 July 2017 through an order dated 4 August 2021. The petitioner’s appeal was dismissed on limitation in March 2024. The petitioner argued that cancellation order of June 2020 was not properly served, and that subsequent SCN was itself invalid since registration already stood cancelled.

Questions before Court

1. Whether the cancellation of registration retrospectively from 1 July 2017 was sustainable when the petitioner had voluntarily applied for cancellation in May 2019?

2. Whether issuance of SCN in July 2021 for non-filing of returns was valid despite prior cancellation of registration in June 2020?

Observations (Paras 7–9)

The Court noted that the petitioner had applied for cancellation in May 2019 and provided an address for correspondence. The cancellation order dated 9 June 2020 was not served properly, depriving the petitioner of knowledge. Importantly, once provisional registration was cancelled in June 2020, the petitioner was not obliged to file GST returns thereafter. Hence, the Show Cause Notice issued in July 2021 was wholly untenable.

Judgment (Para 9–10)

The Court set aside the impugned order dated 9 June 2020 and directed that the petitioner’s GST registration shall be deemed cancelled from 8 May 2019, i.e., the date of his application for cancellation. The writ petition was accordingly disposed of.

Table of Cases Referred

(In this judgment, no other cases were cited. Only statutory interpretation was relied upon.)

Between Fine Lines

For trade and industry, the decision reinforces that once a taxpayer applies for cancellation of registration, the department cannot subsequently issue notices for non-filing of returns as if the registration still subsists. The effective cancellation date must align with the taxpayer’s own application, preventing retrospective liability and undue penal actions.

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