The Delhi High Court in the case of Chetan Garg v. Avato Ward 105 State Goods and Service Tax vide W.P. (C) NO. 4509 OF 2024 CM APPL. NO. 18423 OF 2024 dated 05.04.2024, has held that Proceedings under DRC-01 were independent of proceedings for cancellation of GST registration and could continue despite cancellation of GST registration. Recovery of any amount found due could always be made irrespective of status of registration. Merely pendency of DRC-01 could not be a ground to decline request of assessee for cancellation of GST registration.
In this case, the Petitioner has applied for cancellation of the registration on the ground that Petitioner does not intend to carry on the business under the said GST number. He submits that a query was raised on the said application and Petitioner had duly responded to the said query by response. The Department submits that without considering the same, the application for cancellation was rejected. Thereafter, the petitioner once again has applied for cancellation.
The Department submitted that certain show cause notices were issued to assessee for financial years 2018-19 to 2023-24.
The Court held that the proceedings under DRC-01 are independent of the proceedings for cancellation of GST Registration and can continue despite cancellation of GST registration. The recovery of any amount found due can always be made irrespective of the status of the registration. Thus, merely pendency of the DRC-01 cannot be a ground to decline the request of the tax-payer for cancellation of the GST Registration.
The Court directed that the GST Registration of the Petitioner shall be treated to be cancelled with effect from 01.02.2024 i.e., the date from which Petitioner seeks cancellation of GST registration. Petitioner shall make all the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017 and it would be without prejudice to the proceedings initiated by the Respondents by issuance of DRC-01 for the financial year 2018-19 to financial year 2023-24 and the defence of the Petitioner thereto.
