Facts of the Case

The petitioner, M/S VRR Tours And Travels Private Limited, Bangalore, represented by its Managing Director, challenged before the Karnataka High Court a Show Cause Notice dated 25.04.2022 (Reference No. ZA2904220783784) proposing cancellation of its GST registration, and the consequent ex-parte order dated 12.05.2022 (Reference No. ZA290522034457G) cancelling its registration bearing GSTIN 29AAHCV3408P1ZP, seeking a direction to the respondents to revoke the cancellation. The petitioner's grievance was that it had not been given a reasonable opportunity of hearing before the cancellation, and the order had been passed within about two weeks of the notice.

Issues Involved

  1. Whether the petitioner was afforded a reasonable opportunity of hearing before its GST registration was cancelled.
  2. Whether the ex-parte cancellation order suffered from non-application of mind, given its recitals did not match the actual record.
  3. Whether, and on what conditions, the cancellation deserved to be quashed.

Petitioner's Arguments

  • Was not given a reasonable opportunity before cancellation of the registration.
  • Pointed out that the notice was issued on 25.04.2022 and the cancellation order followed within about two weeks, on 12.05.2022, despite the petitioner not having filed any reply and not having attended the personal hearing.

Respondent's Arguments

  • No independent counter-contention specific to the facts is recorded in the order; counsel for respondent Nos. 2 to 5 and the Central Government Counsel for respondent No. 1 appeared, but the record itself was found to support the petitioner's version.

Court Order/Findings

  • The Court noted that the cancellation order dated 12.05.2022 recorded that the petitioner had filed a reply after the show cause notice and that submissions had been made at the time of hearing, and that registration was cancelled after considering them.
  • It remained undisputed that the petitioner had in fact filed no response and had not attended the personal hearing, meaning the cancellation order's recitals of having considered a reply and hearing submissions were factually incorrect — reflecting non-application of mind and warranting interference.
  • The petition was allowed and the cancellation order dated 12.05.2022 was quashed, on the condition that the petitioner files up-to-date returns and discharges all dues within eight weeks.

Important Clarification

  • A GST registration cancellation order that falsely records having considered a reply or hearing submissions that were, in fact, never filed or attended by the taxpayer reflects non-application of mind and is liable to be quashed on that ground alone.
  • Even where cancellation is quashed for such a procedural defect, courts commonly condition restoration of registration on the taxpayer filing all pending returns and clearing outstanding dues within a stipulated period, rather than granting an unconditional revival.

Sections Involved

  • Section 29, Central Goods and Services Tax Act, 2017 — cancellation of registration, including for non-filing of returns, read with the corresponding provision of the Karnataka Goods and Services Tax Act, 2017.
  • Rule 22, Central Goods and Services Tax Rules, 2017 — procedure for cancellation of registration, including consideration of the reply to a show cause notice.
  • Articles 226 and 227, Constitution of India, 1950 — writ jurisdiction invoked.

Decision – In Favour of

In favour of the Assessee, though conditionally. The ex-parte cancellation order was quashed for non-application of mind, subject to the petitioner filing up-to-date GST returns and discharging all dues within eight weeks.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: WP No. 25221 of 2022 (T-RES)
  • CNR: 2023:KHC:40866
  • Coram: Justice B M Shyam Prasad
  • Decision Date: 16.11.2023
  • Disposal Nature: Allowed (cancellation of GST registration quashed, conditional on filing returns and clearing dues)

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