Facts of the Case

The petitioner, Kalasaiah Annappa, a proprietorship concern based at Sri Siddalingeshwara Temple Road, Yadiyur, Tumkur, Karnataka, holding GSTIN 29APEPA0844H1Z6, filed this writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka at Bengaluru against the Commissioner of Commercial Taxes and the Assistant Commissioner of Commercial Taxes, LGSTO-175, Tumkur, among others. The petition impugned an order dated 30.12.2022 (Reference No. ZA291222230344W) passed by the Assistant Commissioner (second respondent) cancelling the petitioner's GST registration, and sought a direction for revocation and restoration of the registration. The registration was cancelled pursuant to a Show Cause Notice dated 9.11.2022 alleging non-filing of returns for a continuous period of six weeks, a ground for cancellation under the Central/Karnataka Goods and Services Tax Act, 2017. The petitioner's counsel submitted that returns up to the month of December 2022 had in fact been filed, albeit belatedly, on 20.06.2023, undercutting the very basis on which the registration was cancelled. Coram: Justice B.M. Shyam Prasad; order dated 11 December 2023, on preliminary hearing taken up for final disposal with the consent of counsel for both sides.

Issues Involved

  1. Whether the impugned cancellation order, which internally contradicted itself on whether the petitioner had filed a reply to the Show Cause Notice, was vitiated by non-application of mind.
  2. Whether cancellation for non-filing of returns was sustainable once the petitioner had subsequently filed the pending returns.

Petitioner's Arguments

  • The petitioner had filed returns up to December 2022 (belatedly, on 20.06.2023), undercutting the basis for cancellation for non-filing of returns.
  • The petitioner had not in fact filed any reply to the Show Cause Notice dated 9.11.2022, yet the impugned order simultaneously referred to a purported reply dated 12.12.2022 and rejected it as not meriting acceptance — a plain contradiction on the face of the order.

Respondent's Arguments

  • Represented only by the High Court Government Pleader; no substantive defence of the internal inconsistency in the impugned order is recorded, and the matter proceeded to final disposal.

Court Order/Findings

  • The Court found that the impugned order simultaneously recorded that the petitioner had filed a reply dated 12.12.2022 and, in the very next sentence, recorded that no reply had been filed at all.
  • The Court held that this internal contradiction demonstrated obvious non-application of mind by the cancelling authority, warranting interference, though relief was granted on terms rather than unconditionally.
  • The cancellation order dated 30.12.2022 was quashed, conditional on the petitioner filing all necessary declarations (if not already filed) and discharging outstanding dues within four weeks of receiving the certified copy of the order.
  • Liberty reserved to the respondents to initiate action as permissible in law in the event of any default by the petitioner.

Important Clarification

  • A GST registration cancellation order containing self-contradictory recitals — simultaneously acknowledging and denying receipt of the taxpayer's reply to a Show Cause Notice — is liable to be quashed as vitiated by non-application of mind, even where the underlying ground may otherwise have some substance.
  • Relief in such cases is commonly granted 'on terms' — restoration is made conditional upon the taxpayer filing pending returns/declarations and clearing dues within a stipulated period, rather than an unconditional quashing.
  • Belated filing of the pending GST returns after cancellation, while not curing the cancellation order's own procedural defect, is a relevant fact that the writ court will weigh in deciding whether to grant conditional restoration.

Sections Involved

  • Section 29, Central Goods and Services Tax Act, 2017 — cancellation of registration for continuous non-filing of returns, the substantive provision underlying the Show Cause Notice.
  • Section 30, Central Goods and Services Tax Act, 2017 — revocation of cancellation of registration, the relief ultimately sought and granted on conditions.
  • Articles 226 and 227, Constitution of India — writ jurisdiction invoked to challenge the cancellation order.

Decision – In Favour of

In favour of the Assessee — the cancellation order was quashed, subject to compliance conditions 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.: Writ Petition No.26931 of 2023 (T-RES)
  • CNR: Not available on record
  • Coram: Justice B.M. Shyam Prasad
  • Decision Date: 11.12.2023
  • Disposal Nature: Allowed on terms — order dated 30.12.2022 cancelling GST registration quashed, subject to petitioner filing necessary declarations and discharging dues within 4 weeks

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