Oyster Steel And Iron Private Limited vs Assistant Commissioner Circle Vii Group 61 Central Goods And Service Tax Audit I

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 05.10.2026
Judgment pronounced on: 30.10.2026
Judgment uploaded on: 30.10.2026
# CNR No. DLHC010718112023
+ W.P.(C) 15619/2023, CM APPL. 62577/2023
OYSTER STEEL AND IRON PRIVATE LIMITED
.....Petitioner
Through: Mr. Abhishek Garg, Mr. Yash
Gaiha, Mr. Naman Mehta and
Mr. Satyam Singhania, Advs.

versus

ASSISTANT COMMISSIONER CIRCLE VII GROUP 61
CENTRAL GOODS AND SERVICE TAX AUDIT I
.....Respondent
Through: Mr. Aditya Singla, SSC for
CBIC with Mr. Akhil Sharma,
Ms. Nehaol Sri L.V. and Mr.
Dhananjay Gautam, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE BHARAT PARASHAR
J U D G M E N T
ANIL KSHETARPAL, J.:
1. Through the present Writ Petition, the Petitioner assails notice
dated 15.09.2022 (hereinafter, “Impugned Notice”) issued under
Section 65 of the Central Goods and Services Tax Act, 2017
(hereinafter, “CGST Act”), proposing its audit for a period extending
beyond the date from which its GST registration was subsequently
cancelled with retrospective effect.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
13:57:16
W.P.(C) 15619/2023 Page 1 of 13

2. The Petitioner was registered under the CGST Act in July 2017.
On 11.01.2020, it applied for cancellation of its registration with
effect from 31.12.2019 on the ground of discontinuance/closure of
business. The application, however, remained pending with the
Department.
3. While the application was pending, the Respondent issued the
Impugned Notice dated 15.09.2022 under Section 65 of the CGST
Act, proposing an audit of the Petitioner’s books of account and
records for the period from 01.07.2017 to 31.03.2021. The Petitioner
was also called upon to furnish the documents and records specified in
Annexure-A to the Impugned Notice.
4. In its short counter-affidavit, the Respondent has specifically
alleged that the Petitioner failed to disclose the Impugned Notice in its
earlier petition, W.P.(C) 5805/2023. Paragraph 5(m) of the short
counter-affidavit reads as follows:
m. Admittedly, the Petitioner despite being aware of the Notice in
FORM GST ADT-01 dated 15.09.2022 failed to disclose the same in
its earlier Writ Petition (C) No . 5805/2023 which demonstrates that
the Petitioner did not approach this Hon’ble Court with clean hands,
and thus it is not entitled to claim any ' benefit of cancellation of its
registration w.e.f. 31.12.2019.
5. The Petitioner responds to this allegation in paragraph 11(m) of
its rejoinder-affidavit as follows:
“m. The contents of sub-para (m) of paragraph 5 are vehemently
denied. The Respondent is putting baseless allegations against the
Petitioner. It is pertinent to mention that if Respondent/GST
Department had acted as per sub-rule (3) of Rule22 of the CGST
Rules which required them to issue an order within thirty (30) days
from the date of filing of cancellation application the Petitioner did
not even have to file the Writ Petition (C) No. 5805 of 2023 for
cancellation of GST registration. It seems the Respondent is trying
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 2 of 13

to boast their non-adherence and violation of statutory provisions
framed under the CGST Act & CGST Rules”.
6. Although the Petitioner generally denies the allegation, it does
not specifically state that the Impugned Notice was disclosed in
W.P.(C) 5805/2023. Its reliance upon the Department’s delay in
processing the cancellation application does not answer the allegation
of non-disclosure. The Petitioner’s awareness of the Notice before
disposal of that Petition is also evident from its reply dated
03.05.2023. Accordingly, we find that the Impugned Notice was not
disclosed in the earlier proceedings.
7. When the Impugned Notice was issued, the Petitioner’s
application for cancellation had not been processed, and its
registration continued to be reflected as active on the GST portal. The
Petitioner acknowledges this position in its rejoinder.
8. Since its application for cancellation was pending for a long
time, the Petitioner filed W.P.(C) 5805/2023 seeking, inter alia ,
cancellation of its registration with effect from 31.12.2019, without
disclosing the Impugned Notice. By order dated 04.05.2023, this
Court recorded the Respondent’s submission, made on instructions,
that no pending application was visible on the portal, apparently on
account of a technical glitch, and that a ticket had been raised to
address the issue. The screenshot showing submission of the
application was not disputed. This Court accordingly directed the
Respondent to process the application within four weeks and further
directed that the cancellation would take effect from 31.12.2019.
Upon acceptance of the application, returns filed for the period
thereafter were to be treated as void and non-est.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 3 of 13

9. On 03.05.2023, one day before the aforesaid order was passed,
the Petitioner submitted its reply to the Impugned Notice. The order
dated 04.05.2023 makes no reference to the Impugned Notice or the
proposed audit proceedings.
10. The Petitioner’s registration was thereafter cancelled with effect
from 31.12.2019. In November 2023, the Petitioner instituted the
present Writ Petition seeking quashing of the Impugned Notice and
the proceedings arising therefrom. By order dated 05.12.2023, notice
was issued in the Petition and operation of the Impugned Notice was
stayed.
SUBMISSIONS ON BEHALF OF THE PARTIES
11. Learned counsel for the Petitioner submits that Section 65 of
the CGST Act authorises audit only of a “registered person”. It is
contended that once the Petitioner’s registration stood cancelled with
effect from 31.12.2019, it could no longer be regarded as a registered
person for the purposes of Section 65. On this basis, the Impugned
Notice and the proceedings arising therefrom are stated to be without
jurisdiction.
12. It is further submitted that, in any event, the Impugned Notice
proposes an audit up to 31.03.2021 despite cancellation of the
registration with effect from 31.12.2019. Reliance is placed upon the
decision of the Madras High Court in Tvl. Raja Stores v. Assistant
1
Commissioner (ST) and paragraph 7.1.2 of the Model All India GST
Audit Manual, 2023.

1
W.P.(MD) No.15291 of 2023, decided on 11.08.2023/ MANU/TN/6752/2023
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Signed By:SAVITA
PASRICHA
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W.P.(C) 15619/2023 Page 4 of 13

13. Per contra , learned Senior Standing Counsel appearing for the
Respondent submits that cancellation of registration does not
extinguish liabilities or statutory obligations pertaining to the period
during which the registration subsisted. Reliance is placed upon
Section 29(3) of the CGST Act and the decisions in L.J. Victoria
2
Properties Private Limited v. Union of India and Ashoka Fabricast
3
Private Limited v. Union of India . It is further emphasised that,
when the Impugned Notice was issued, the Petitioner’s application for
cancellation had not been decided and its registration continued to
subsist.
14. In paragraph 5(j) of its counter-affidavit, the Respondent states
that it seeks permission to conduct an audit from financial year 2017-
18 up to the date of cancellation of the GSTIN, while also referring to
the period specified in the Impugned Notice. Its case, however, is that
an audit is permissible since the Petitioner was registered during the
relevant period.
15. The Respondent further contends that the Petitioner’s failure to
disclose the Impugned Notice in W.P.(C) 5805/2023 disentitles it to
discretionary relief.
ISSUE
16. The question, therefore, is whether the subsequent cancellation
of the Petitioner’s registration with retrospective effect from
31.12.2019 prevents the Respondent from proceeding with the

2
2024:BHC-OS:18689-DB, decided on 19.11.2024
3
2024:RJ-JP:20409-DB, decided on 01.05.2024
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 5 of 13

Impugned Notice dated 15.09.2022 under Section 65 of the CGST
Act, either altogether or in respect of the period after 31.12.2019.
ANALYSIS & FINDINGS
17. We begin with the statutory scheme governing audit and
cancellation of registration. Section 2(13) of the CGST Act defines an
“audit” as examination of records, returns and other documents
maintained or furnished by a registered person for verifying, inter
alia , the correctness of turnover declared, taxes paid, refund claimed
and input tax credit availed, and for assessing compliance with the
provisions of the Act and the Rules. A “registered person”, in turn, is
defined by Section 2(94) as a person registered under Section 25 of
the CGST Act.
18. Section 65(1) of the Act empowers the Commissioner or an
officer authorised by him to undertake audit of “any registered
person” for such period, at such frequency and in such manner as may
be prescribed. Rule 101(1) of the Central Goods and Services Tax
Rules, 2017 (hereinafter, “CGST Rules”) provides that the period of
audit may comprise a financial year, part thereof, or multiples thereof.
Rule 101(2) further provides that, where it is decided to undertake
audit of a registered person, notice in FORM GST ADT-01 shall be
issued.
19. An application for cancellation does not bring the registration to
an end. Under Rule 21A(1) of the CGST Rules, registration is deemed
to be suspended from the date of submission of the application or the
date from which cancellation is sought, whichever is later, pending
completion of proceedings under Rule 22. Rule 21A(3) continues to
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 6 of 13

describe the person whose registration is suspended as a “registered
person”.
20. The Petitioner’s registration was deemed to be suspended from
11.01.2020 under Rule 21A(1), that being the later of the date of its
application and the date from which cancellation was sought. Its
continued description as active on the portal did not displace that
statutory consequence. Suspension, however, did not bring the
registration to an end. When the Impugned Notice was issued on
15.09.2022, the cancellation application remained undecided. The
Notice proposed audit for the period from 01.07.2017 to 31.03.2021.
21. What, then, does the expression “registered person” mean in
Section 65? Because the definitions in Section 2 apply “unless the
context otherwise requires”, that phrase must be read in light of the
function an audit performs under the Act. As Section 2(13) makes
clear, the subject of an audit is not the taxpayer’s present status on the
common portal, but the records, returns and documents maintained or
furnished under the GST regime to verify past compliance.
22. An audit under the Act looks backwards. It examines records
already maintained, returns already furnished, credits already availed
and refunds already claimed. The provision thus directs attention to
conduct under a registration and the records relating to it. The
expression “registered person” cannot, in this context, be confined to a
person whose registration continues to be effective when that
examination takes place.
23. The expression “for such period” has no connection between
the period during which the assessee was registered and the subject of
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 7 of 13

audit. The question here concerns a period covered by a registration
which had been granted and had not then been cancelled, but which
was subsequently cancelled with retrospective effect. The continued
legal effectiveness of that registration and the power to examine what
occurred under it are related, but they are not the same question.
24. For the purposes of Section 65, we distinguish between a period
during which no registration existed from one covered by a
registration which was subsequently cancelled retrospectively. In the
latter case, cancellation determines the legal effectiveness of the
registration from the specified date. It does not, however, erase the
historical fact that registration had been granted or that acts may have
been undertaken under it. Read in the context supplied by Section
2(13), the expression “registered person for such period” permits
scrutiny of those acts and the records relating to them,
notwithstanding the subsequent alteration of their legal consequences.
25. This construction gives effect to both cancellation and audit.
Cancellation may affect the legal treatment of a transaction, return or
claim, whereas audit examines the facts necessary to determine the
consequences prescribed by law.
26. Section 29(3) preserves liabilities and statutory obligations for
periods prior to the date of cancellation. However, Section 29(3) does
not answer whether an audit may extend to a period after the effective
date of retrospective cancellation. The authority for that examination
must come from Sections 2(13) and 65 read with Rule 101.
27. This understanding draws support from the contextual approach
adopted in L.J. Victoria Properties (supra) . The Bombay High Court
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Signed By:SAVITA
PASRICHA
Signing Date:30.10.2026
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explained that “registered person” must be understood in the setting of
an audit, which examines records maintained, declarations made and
benefits claimed in the past. Subsequent cancellation does not, for that
reason alone, exclude a person from Section 65.
28. The Court also held that registration must be considered in
relation to the financial year or period audited. There, the taxpayer had
admittedly remained registered during that period, and cancellation
preceded the audit notice. The decision did not concern cancellation
subsequently given retrospective effect from a date falling within the
audited period. It therefore does not directly determine the present
question.
29. We adopt the contextual approach of L.J. Victoria Properties
(supra) while deciding that further question independently. Where a
registration had been granted and had not yet been cancelled during
the period proposed for audit, that factual nexus satisfies Section 65
even if the registration is subsequently cancelled retrospectively.
30. In the present case, the Petitioner was granted registration in
2017. Its cancellation application, remained pending even after the
period covered by the Impugned Notice had ended. During the
pendency of that application, its status was governed by Rule 21A.
The fact that cancellation was later given retrospective effect from
31.12.2019 does not place the records and statutory conduct referable
to that registration for the period specified in the notice beyond the
reach of an audit under Sections 2(13) and 65.
31. The conclusion does not depend upon treating issuance of
ADT-01 as fixing jurisdiction irrespective of subsequent events. It
Signature Not Verified
Signed By:SAVITA
PASRICHA
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follows from the scheme of Sections 2(13) and 65 read with Rule 101
and the nature of the audit thereby authorised. Nor do we suggest that
the Petitioner in fact carried on business, made taxable supplies or
incurred tax liability after 31.12.2019. None of those matters can be
assumed merely from the issuance of the audit notice. If they arise for
consideration, they must be examined in accordance with the
cancellation order and the governing provisions of the Act.
32. The direction concerning the returns also does not place the
underlying records beyond examination. A return is one mode through
which statutory information is furnished. An audit under Section 65
has a wider field of examination and extends to books of account,
records and documents relevant to turnover, tax paid, input tax credit,
refunds and compliance with the Act and the Rules. Treating a return
as void and non-est therefore does not, without more, erase the
transactions or records underlying it.
33. Audit does not itself determine tax liability. If matters
contemplated by Section 65(7) are detected, consequential action must
satisfy the requirements of the applicable statutory provision.
34. The decision of the learned Single Judge of the Madras High
Court in Tvl. Raja Stores v. Assistant Commissioner (ST) (supra),
relied upon by the Petitioner, proceeds on a different construction.
Reading the words “any registered person” as confined to an existing
concern, the Court held that Section 65 could not be invoked after
cancellation of registration, though it granted liberty to the authorities
to initiate proceedings under Sections 73 and 74 of the Act. In L.J.
Victoria Properties (supra) the Division Bench of the Bombay High
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PASRICHA
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Court disagreed with that view, noting both that Tvl. Raja Stores had
not considered Section 29(3) and Rule 101, and that an audit under
Section 65 operates in aid of proceedings under Sections 73 and 74.
We respectfully agree that Tvl. Raja Stores (supra) overlooks the
scheme of Sections 2(13) and 65 read with Rule 101, and we are
therefore unable to adopt its construction.
35. In Ashoka Fabricast (supra) , the Jaipur Bench of the Rajasthan
High Court upheld recourse to Section 65 after cancellation, holding
that the expression “registered person” included persons registered
during the period audited. The judgment refers to financial year 2019-
20 and cancellation on 16.01.2020, but the Court did not separately
determine the permissibility of auditing the portion of a financial year
falling after the effective cancellation date. We therefore rely upon it
only for its rejection of an absolute bar to audit after cancellation.
36. Paragraph 7.1.2 of the Model All India GST Audit Manual,
2023 contemplates cancellation from an anterior date preceding
initiation of audit and advises that, if deemed fit, audit need not be
carried out, with the taxpayer’s details being shared with the
jurisdictional officer and enforcement wing. The discussion is not
confined to cancellation orders made before issuance of ADT-01.
Nevertheless, the Manual is only for departmental guidance and
cannot determine the scope of the statutory power. To the extent the
paragraph suggests that retrospective cancellation necessarily excludes
examination under Section 65 of records and conduct referable to the
registration, we are unable to adopt that interpretation for the reasons
recorded above.
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Signed By:SAVITA
PASRICHA
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37. We have also considered the statement in paragraph 5(j) of the
counter-affidavit that permission for audit may be granted from
financial year 2017-18 “till date of cancellation of the GSTIN”. The
same paragraph refers to the audit period specified in the Impugned
Notice, and the Respondent thereafter specifically maintains the
validity of the notice for the period 01.07.2017 to 31.03.2021 and
seeks dismissal of this Petition. Read in the context of the counter-
affidavit as a whole, we do not regard the expression as an
unequivocal concession that the audit must terminate on 31.12.2019.
38. We accordingly reject the contention that retrospective
cancellation with effect from 31.12.2019 renders the Impugned Notice
without jurisdiction, either wholly or for the subsequent portion of its
stated period. The period specified in the Impugned Notice is
therefore not liable to be curtailed on that ground. Nothing in this
judgment permits the Respondent to treat the post-31.12.2019 returns
as legally valid, to disregard the retrospective cancellation, or to
assume that taxable supplies were made, tax liability arose, or any
other statutory consequence followed during that period. Our decision
is confined to the effect of retrospective cancellation and does not
determine any other statutory requirement governing the conduct or
completion of the audit.
39. Apart from the reasons recorded above, the Petitioner’s conduct
also disentitles it to discretionary relief. The pending audit was
material to the relief sought in the earlier Writ Petition. The
Department’s delay in processing the cancellation application did not
absolve the Petitioner of its obligation to disclose the Audit Notice.
Having failed to do so, the Petitioner now relies upon the directions
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PASRICHA
Signing Date:30.10.2026
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W.P.(C) 15619/2023 Page 12 of 13

obtained in those proceedings to seek quashing of that very Notice. In
these circumstances, this Court declines relief on this additional
ground as well.
40. It is open to the Respondent, if so advised, to seek modification
of the order dated 04.05.2023 in W.P.(C) 5805/2023 in accordance
with law.
CONCLUSION
41. For the foregoing reasons, we find no ground to interfere with
the Impugned Notice dated 15.09.2022. The Writ Petition is
accordingly dismissed. The interim order dated 05.12.2023 stands
vacated.

ANIL KSHETARPAL, J.

BHARAT PARASHAR, J.
OCTOBER 30, 2026
sp/ad

Signature Not Verified
Signed By:SAVITA
PASRICHA
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