Facts of the Case

The petitioner, Sri Annapooraneshwari Hydraulics, a proprietorship concern represented by its proprietrix Smt. Dasegowda Lakshmidevi, Bengaluru, challenged the cancellation of its GST registration by order dated 3 February 2023 (Annexure-C) passed by the Superintendent of Central Tax, Range ANWD-4, North West Division-4, Bengaluru, following a show-cause notice dated 9 December 2022. The petitioner sought a writ of mandamus to quash the cancellation and direct revocation. It was undisputed that the show-cause notice was served, that the petitioner had not filed any reply, and that the petitioner had not availed the statutory appellate remedy within the period permitted under the Goods and Services Tax Act, 2017. The petitioner stated it could not file returns for the period between May 2022 and November 2022 due to non-realisation of receipts from a service provider, but had since been permitted to file returns up to March 2023.

Issues Involved

  1. Whether the writ court could intervene despite the petitioner's admitted failure to reply to the show-cause notice or to avail the statutory remedy of appeal or revocation application.
  2. Whether the cancellation order dated 3 February 2023 was validly passed, given the reasons recorded by the respondent for cancellation.
  3. Whether the petitioner was entitled to revocation of the cancellation, and on what conditions.

Petitioner's Arguments

  • Being a small service provider, the petitioner could not file returns for May 2022 to November 2022 because it was unable to realise payments from its service recipient, but has since been permitted to file returns up to March 2023.
  • The Court should intervene despite the failure to avail the statutory remedy, because if the cancellation predated 31 December 2022, the petitioner could have applied for revocation without recourse to appeal until 30 June 2023, extended to 30 August 2023 — a window the petitioner argued should still weigh in its favour.
  • The cancellation order itself was flawed on its face, since it purported to consider a reply and personal-hearing submissions that the petitioner never in fact made.

Respondent's Arguments

  • The respondent's cancellation order recorded that it had considered the petitioner's reply to the notice dated 9 December 2022 and submissions made at a personal hearing.
  • However, the record — and the department's own case before the Court — did not dispute that the petitioner had in fact filed no reply and that no representative had appeared for any personal hearing, leaving the factual basis recorded in the impugned order effectively unsupported.

Court Order/Findings

  • The Court found it obvious that the cancellation of registration was passed without application of mind and contrary to settled canons, since the order relied on a reply and hearing submissions that the petitioner had never made.
  • The petition was allowed, and the impugned order dated 3 February 2023 was quashed, with a direction to the respondent to revoke the cancellation of the petitioner's GST registration.
  • The revocation was made conditional: the petitioner must, within four weeks of receiving a certified copy of the order, file returns for all months up to date and discharge liabilities along with interest.
  • The Court thereby balanced the procedural infirmity in the cancellation with the petitioner's own default in return filing.

Important Clarification

  • A GST registration cancellation order that records consideration of a reply or personal hearing which the taxpayer never actually made is liable to be quashed as passed without application of mind, even where the taxpayer did not avail the statutory appeal.
  • Courts may still exercise writ jurisdiction despite non-exhaustion of statutory remedies where the cancellation order is ex facie based on a factually incorrect premise.
  • Revocation directed by the Court is typically conditional on the taxpayer filing all pending returns and discharging tax liability with interest within a fixed period — relief is not unconditional.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — governs registration, show-cause notice procedure, and cancellation/revocation of GST registration.

Decision – In Favour of

Assessee. The petition was allowed and the cancellation of GST registration was quashed, with a direction to revoke it — subject to the petitioner filing all pending returns and paying outstanding liabilities with interest within four 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.16535 of 2023 (T-RES)
  • CNR: Not available on record (Neutral Citation: 2023:KHC:41559)
  • Coram: Justice B M Shyam Prasad
  • Decision Date: November 20, 2023
  • Disposal Nature: Petition allowed; cancellation of GST registration quashed and revocation directed

Link to Download the Order

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