Cancellation of gst registration

Are you filed all the returns (i.e GSTR1/3B) up to date as required to be filed before cancellation of GST registration ?

Yes all filled

If taxable person cease to be a taxable person then business assets deemed to be supplied by him. so I think you have to pay tax on balance input and capital goods lying on the date immediately before cancel registration

In cash or adjust in credit

You can adjust with credit ledger and balance itc will lapse

How can adjust pls provide

"Furnishing details of closing stock/capital Goods held at the time of ceasing the business and paying tax thereon is required to be done after cancellation of GST registration in form GSTR 10 final Return."

This process is required to be done after cancellation order not before cancellation/apply for cancellation.

Note : In your case, you have to contact your jurisdiction officer for clarification regarding liability/rejection.