Tax liability after the GSTIN cancelled.

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This query is : Resolved

JIGNESH (Querist)

17 December 2025 My client GST number cancel (suo_moto) since last 3 years. Now, he appling new registration number on same pan. But department issue notice and require bank statement for the period which was cancelld GST number. Now, my client was continusly business after the cancel the GSTIN and many credit entry shown in bank statement also. Now, will the department be able to issue demand notice for paying taxes for releated this period ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

18 December 2025 Cancellation of GSTIN (suo moto):
When GST registration is cancelled by the department, the taxpayer is technically not permitted to make taxable supplies. However, if business continues, liability to pay GST does not vanish. The law (CGST Act, Sec. 29 & 30) allows the department to recover tax dues even for the cancelled period if taxable supplies were made.
• Fresh Registration on Same PAN:
While applying for new registration, the department often scrutinizes past compliance. That’s why they are asking for bank statements — to check if business was carried on despite cancellation.
• Demand Notice Possibility:
Yes, the department can issue demand notice under Section 73/74 of CGST Act for recovery of tax, interest, and penalty for the period during which business was conducted without valid GST registration.
• Section 73 → for non-fraudulent cases (tax not paid/short paid).
• Section 74 → for fraudulent suppression/misstatement.

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