GST Refund Can't Be Granted Until Cancelled Registration Is Restored: Delhi High Court

GST Refund Can't Be Granted Until Cancelled Registration Is Restored: Delhi High Court

Background of the Dispute

The Delhi High Court has ruled that a trader whose GST registration has been cancelled is not eligible to claim a GST refund until the registration is restored.

Factual Background

The petitioner, Shree Radhe Vallabh Traders, had exported goods to foreign buyers and claimed a refund of Rs. 1,19,29,742/-. However, the petitioner's GST registration had been cancelled in February 2023, with retrospective effect from July 2018.

Procedural History

The petitioner failed to respond to the show-cause notice regarding the cancellation of GST registration and also did not attend the personal hearing. Additionally, the refund application was not actively pursued, and the petitioner remained absent from the hearing scheduled for the same.

Contentions of the Parties

Petitioner's Contentions: The petitioner claimed a refund of GST paid on exports made to foreign buyers.

Respondent's Contentions: The respondent argued that since the petitioner’s GST registration had been cancelled, no refund could be granted under the law.

Court’s Findings and Legal Analysis

Observations of the Court

The court observed that the petitioner's GST registration had been cancelled retrospectively from 2018, and therefore, no refund could be granted unless and until the registration is restored. It further noted that the petitioner had withheld crucial information, including the cancellation of the GST registration.

Reasoning & Analysis

The Division Bench of Justices Prathiba M. Singh and Shail Jain held that the status of GST registration is critical in determining the eligibility for refunds. The court emphasized that the petitioner must first seek restoration of its GST registration before claiming any refunds.

Implications

The court's decision has implications for traders whose GST registration has been cancelled. It highlights the importance of maintaining a valid GST registration to claim refunds.

Outcome

The court dismissed the petition with Rs 25,000/- costs, holding that the petitioner is not entitled to a refund until its GST registration is restored.

In this case the appellant was represented by Mr. Akhil Krishan Maggu, Advocate.