To a query whether sales tax de-registration and cancellation are same things, sources said that under rule 11 of the Sales Tax Rules, de-registration and cancellation of registration are entirely two different things. The registered persons have to follow a detailed procedure for obtaining de-registration certificates. Once a person is de-registered, his sales tax registration number (STRN) cannot be restored. In case of cancellation of registration by tax department, the proceedings can be initiated against the individual. The department can also re-activate the sales tax registration in cases of cancellation. Thus, cancellation of sales tax registration and de-registration process cannot be treated as same under the Sales Tax Rules. The de-registration application has been filed by the registered person whereas the cancellation of registration is being done by the tax department. Separate processes have been applied in two different legal situations under the sales tax law. Thus, the department cannot give similar treatment to the de-registered persons or cancelled registrations.
How to Cancel Sales Tax Number?
With above illustration, you understand that only cancellation process is in the hands of tax authorities. Tax payer can only put an application for de-registration of sales tax.
De-registration of Sales Tax Number?
Sales Tax Act, 1990 allows tax payer to file de-registration of sales tax number if fulfil the criteria defined in section 21 of the act.
This application is only available which you need to apply through STR-3 Form.
AT time of filing application system required “Evidence with 21(1) Application for De-Registration of Sales Tax”. Its simply you need to attach STR-3 form along with your application.
Section 21 De-registration, blacklisting and suspension of registration
(1) The Board or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act.
Rule 11 Sales Tax Rules 2006
(1) Every registered person who ceases to carry on his business or whose supplies become exempt from tax, or who ceases to remain registered shall apply to the Commissioner Inland Revenue having jurisdiction for cancellation of his registration in Form STR- 3, and the Commissioner, on such application or on its own initiative, may issue order of de- registration or cancellation of the registration of such person from such date as may be specified, but not later than ninety days from the date of such application or the date all the dues outstanding against such person are deposited by him, whichever is later and such person shall caused to be de- registered through computerized system accordingly.
(2) The Commissioner, upon completion of any audit proceedings or inquiry which may have been initiated consequent upon the application of the registered person for de-registration, shall complete the proceedings or inquiry within ninety days from the date of application and direct the applicant to discharge any outstanding liability which may have been raised therein by filing a final return
under section 28: Provided that the person applying for de-registration shall not be de-registered unless he provides record for the purpose of audit or inquiry.
(3) If a registered person fails to file tax return for six consecutive months, the Commissioner, without prejudice to any action that may be taken under any other provision of the Act, after issuing a notice in writing and after giving an opportunity of being heard to such person, shall issue order of de-registration of such person and the computerized system shall be caused to de-register the person accordingly.
(4) The obligations and liabilities of the person whose registration is cancelled under sub- rule (1) relating to the period when he conducted business as a registered person shall not be affected by the fact that his registration has been cancelled or that he has ceased to be a registered person.]
Section 28 – Final Return – Sales Tax Act 1990
Final Return.– If a person applies for de-registration in terms of section 21, he shall before such de-registration, furnish a final return to the commissioner in the specified form in such manner and at such time as directed by the commissioner.
Section 29 – Return deemed to have been made
A return purporting to be made on behalf of a person by his duly appointed representative shall, for all purposes, be deemed to have been made by such person or under his authority unless proved to the contrary.
