GST department must process registration cancellation applications expeditiously and cannot indefinitely delay

The Delhi High Court has ruled that the GST department must process applications for the cancellation of GST registration without undue delay. In a case involving Balaji Trading Co., the court directed the department to decide on the cancellation application within four weeks, noting that the petitioner had provided all necessary information and complied with requirements. This judgment reinforces the need for administrative accountability and timely processing of taxpayer requests, particularly when a business has ceased operations.

The Hon'ble Delhi High Court in the case of Balaji Trading Co. v. Principal Commissioner, Department of Trade and Taxes, GNCTD [W.P.(C) 12169/2025 & CM APPL. 49636/2025, order dated August 13, 2025] directed the tax department to process the petitioner's GST registration cancellation application within four weeks where the business was closed and the department had not acted on the pending application despite all sought information being provided.

Facts:

Balaji Trading Co. ("the Petitioner") was registered under GST on September 4, 2022. The Petitioner closed business operations on January 2, 2025 and applied for cancellation of its GST registration on the same date. The department sought further information on February 20, 2025, which the Petitioner duly provided. However, as of the time of writ petition, no further notices were received nor had any decision been taken by the department regarding the cancellation application. During the writ hearing, the revenue counsel submitted that the matter would be processed expeditiously.

Issue:

Whether the GST department can indefinitely delay action on an application for cancellation of registration once all required information has been furnished, and whether a direction for expeditious disposal is warranted?

Held:

The Hon'ble Delhi High Court in W.P.(C) 12169/2025 held as under:

• Noted that, the Petitioner had provided all documents and complied with requirements for cancellation and the department had not taken any decision despite no pending queries.
• Observed that, the department's counsel undertook that the cancellation would be processed expeditiously.
• Directed that, the application for cancellation of registration be processed within a period of four weeks from the order and, in any case, not later than September 30, 2025 and disposed of the writ petition with this direction.

Our Comments:

This judgment enforces administrative accountability and procedural fairness in GST matters. The Court reaffirmed that closure of business and submission of all requisite documents must lead to timely processing of GST registration cancellation, and departments cannot defer decisions without justification. Such directions uphold taxpayer rights, promote ease of doing business, and ensure that administrative delay does not prejudice businesses that have ceased operations.

In the case of Shree Shakti Sales v. Principal Commissioner of Department of Trade and Taxes [W.P.(C) 2745/2024 & CM APPL. 11169/2024 order dated February 23, 2024], the Hon'ble Delhi High Court held that where the petitioner had closed business and applied for GST registration cancellation, the department must process the application within two weeks from the court order, ensuring expeditious disposal.

In JMD Enterprises v. Sales Tax Officer [W.P.(C) 6502/2025 & CM APPL. 29651/2025, order dated May 15, 2025], the Hon'ble Delhi High Court directed that an application for revocation of GST registration cancellation must be decided within one month where the petitioner had filed all requisite documents and complied with requirements.

Relevant Provision:

Section 29 of the Central Goods and Services Tax Act, 2017:

Cancellation or suspension of registration.-

"(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,-

(a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or

(b) there is any change in the constitution of the business; or

(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24.

Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed."

Official judgment copy has been attached