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Facts of the Case

Worldwide Metals Private Limited had applied on 11.01.2020 for cancellation of its GST registration with effect from 31.12.2019, in Form GST REG-16, receiving ARN No. AA070120023003B. The application remained unprocessed for over three years, during which the petitioner continued to receive, and comply with, notices for non-filing of returns. The petitioner filed a writ petition before the Delhi High Court seeking a direction for processing of its long-pending cancellation application.

Issues Involved

  1. Whether the department could be directed to process a cancellation application pending for over three years due to an apparent technical glitch on its own portal.
  2. What consequence follows for returns filed by the petitioner for periods after the requested cancellation date, once cancellation is eventually processed with effect from that date.

Petitioner's Arguments

  • The petitioner submitted screenshots from the GST portal showing that the cancellation application dated 11.01.2020, with the corresponding ARN, had indeed been filed, notwithstanding the department's portal not reflecting any pending application.
  • It was argued that the department should be directed to process the application and give effect to cancellation from the originally requested date, 31.12.2019.

Respondent's Arguments

  • Counsel for the respondent submitted, on instructions, that there appeared to be a technical glitch on the department's portal, as it did not reflect any pending cancellation application, and that a ticket had been raised to address the issue.
  • The respondent did not dispute the authenticity of the screenshot evidencing the petitioner's original filing of the cancellation application.

Court Order / Findings

  • Given the department's own acknowledgment of a technical glitch and its non-disputal of the petitioner's screenshot evidence, the Court found it appropriate to issue specific directions to resolve the long-pending application.
  • The Court directed the respondent to process the cancellation application within four weeks, with cancellation to take effect from 31.12.2019, the date originally sought by the petitioner.
  • The Court further held that if the cancellation is accepted, any returns filed by the petitioner for periods after 31.12.2019 shall be treated as void and non-est, with the petitioner directed to also file a fresh application and a hard copy as a fail-safe measure.

Important Clarification

  • Where a taxpayer's GST registration cancellation application is stalled purely due to a technical/portal glitch attributable to the department, courts will direct processing of the application with retrospective effect from the originally requested date, rather than the date of the court's order.
  • Once cancellation takes effect retrospectively, any returns filed by the taxpayer for the intervening period (after the cancellation date) are rendered void and non-est, since the taxpayer was not, in law, a registered person during that period.

Sections Involved

  • Section 29, CGST Act, 2017 – governs cancellation of registration, including on the assessee's own application.
  • Form GST REG-16 – the prescribed application form for cancellation of registration.

Decision – In Favour of

The decision is in favour of the assessee. The department was directed to process the pending cancellation application within four weeks with effect from the originally requested date, and returns filed thereafter were held void and non-est.

Case Details

Court: High Court of Delhi
Case No.: W.P.(C) 5756/2023
CNR / Citation: Not available in judgment text
Coram: Hon'ble Mr. Justice Vibhu Bakhru and Hon'ble Mr. Justice Amit Mahajan
Date of Order: 04 May 2023

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