Facts of the Case

The petitioner, Oyster Steel and Iron Private Limited, had applied for cancellation of its GST registration on 11.01.2020 by filing Form GST REG-16, generating ARN No. AA0701200230148. The application was never processed by the department. Consequently, the petitioner continued to receive notices for non-filing of returns for the intervening period, which it duly complied with, while asserting these were made only to avoid default consequences. The petitioner approached the Delhi High Court seeking a direction that the GSTIN be cancelled with effect from 31.12.2019, the date from which cancellation had originally been sought.

Issues Involved

  1. Whether the respondent was obligated to process the petitioner's long-pending cancellation application.
  2. Whether cancellation should take effect from the date originally sought (31.12.2019), notwithstanding the technical glitch that prevented the department's portal from reflecting the pending application.
  3. What is to become of the returns filed by the petitioner for periods after the requested cancellation date.

Petitioner's Arguments

  • The petitioner had applied for cancellation of GSTIN on 11.01.2020, seeking effect from 31.12.2019, evidenced by a portal screenshot and ARN.
  • Despite the application, the petitioner continued to receive notices for non-filing of returns, which it complied with only to avoid adverse consequences, notwithstanding the pending cancellation request.
  • The GSTIN should be cancelled with effect from 31.12.2019, and returns filed after that date should be treated as void.

Respondent's Arguments

  • The department's portal did not reflect any pending cancellation application, apparently due to a technical glitch, for which a ticket had been raised.
  • The respondent did not dispute the petitioner's screenshot evidencing filing of the cancellation application and Form GST REG-16 on 11.01.2020.

Court Order / Findings

  • The Court held that since the department did not dispute the petitioner's evidence of having filed the cancellation application on 11.01.2020, the cancellation must take effect from 31.12.2019, the date originally sought by the petitioner.
  • The respondent was directed to process the petitioner's cancellation application within four weeks.
  • If the application is accepted, returns filed by the petitioner for the period after 31.12.2019 shall be treated as void and non-est.
  • To avoid further delay, the petitioner was directed to submit a hard copy of the application and to file a fresh application seeking cancellation effective 31.12.2019; if the portal did not accept it, the petitioner was to communicate this to the authority.

Important Clarification

Where a GST cancellation application is genuinely filed and evidenced (e.g., by ARN and portal screenshot) but not processed due to a departmental or portal-side technical glitch, courts will direct cancellation to take effect from the date originally applied for, and treat returns filed for the intervening period — filed only to avoid default consequences pending processing — as void and non-est once cancellation is given effect.

Sections Involved

  • Section 29, Central Goods and Services Tax Act, 2017 – governs cancellation of registration, including cancellation on the taxpayer's own application.
  • Form GST REG-16, Central Goods and Services Tax Rules, 2017 – the prescribed application form for cancellation of GST registration.

Decision – In Favour of

The petition was disposed of with specific directions in favour of the Assessee, requiring the department to process the cancellation application with retrospective effect and treat intervening returns as void.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 5805/2023
Coram: Hon'ble Mr. Justice Vibhu Bakhru and Hon'ble Mr. Justice Amit Mahajan
Date of Order: 04.05.2023

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