The registration number cannot be canceled radically due to a paper defect

Getting a new registration number under GST law is very difficult and getting the registration number back is even more troublesome. The application for cancellation of registration number is rejected without any reason and then the government cancels the registration number at will by inception. By doing this, the tax credit claim of all the recipients of such a person becomes vacated and the government demands the return of the tax credit sought from the recipient with interest and penalty. including. Thus, arbitrary action is taken and the helpless trader has to keep fighting when the trader's list is delinquent. Section 29(2) empowers the Accounts to cancel the registration number but for the time when the business is going on and the lists are filled. For cancellation of registration number there should be a specific reason. In such a case as to whether the registration can be radically canceled as the sheet is defective, Hon. Before the Delhi High Court Balaji Plastomers Pvt. Ltd. Vs. Commissioner of Delhi (WP (C)No. 14160 of 2023) has given a very interesting judgment which is discussed in today's article.

The facts of the case

All the forms were filled till the time the petitioner company continued to carry on business and they had an instance of registration from 1.7.2017. Due to financial loss the business was closed and dt. On 28.11.2019, an application was made to cancel the registration number. After that all the forms till November 2019 were filled. Now, in pursuance of the application for cancellation of the registration number, a notice was issued by the account which was not answered by the applicant, due to which the account officer rejected the application for cancellation of the registration number. Thereafter the petitioner again applied for cancellation of registration number and in pursuance of the same a notice was issued by the account as the petitioner strongly believed that his registration number has been canceled and the notice has nothing to do with it. This second application was also rejected by the account and a show cause notice was issued by the account due to non-filling of forms for 6 consecutive months. Thereafter the registration number was suspended and the instance of registration was canceled outright which annoyed Hon. Appealed to the High Court.

Judgment of the High Court

It was specifically noted by the Delhi High Court that the account did not give any time limit for appearing in person in the show cause notice and also there was no mention that the registration number had been radically cancelled. No reasons were given in the order canceling the registration number. Thus, taking into account all the facts, the Delhi High Court held that the order of cancellation of the registration is baseless and the registration number cannot be canceled for the period for which the forms are filled.