Facts of the Case

M/S Laxmi Enterprises, a sole proprietorship, sought quashing of the cancellation of its GST registration vide order No. ZA290324050755E dated 13.03.2024, and a direction to restore its GSTIN. The petitioner's counsel pointed out that the issue was squarely covered by a coordinate bench ruling of the same High Court in W.P. No. 107545 of 2023 (disposed of on 05.02.2024), involving near-identical facts of registration cancellation for non-filing of returns for a continuous period, which had been quashed for want of reasons.

Issues Involved

  1. Whether a GST registration can be validly cancelled under Section 29(2)(c) without the competent authority assigning reasons beyond merely citing non-filing of returns for six months.
  2. Whether such a cancellation order, made without application of mind, violates the registrant's right to carry on business under Article 19(1)(g) of the Constitution.

Petitioner's Arguments

  • The issue was identical to one already decided by a coordinate bench of the same Court, which had quashed a similar cancellation for want of reasons.

Respondent's Arguments

  • The Revenue's counsel did not dispute the position of law laid down by the coordinate bench in the precedent relied upon.

Court Order / Findings

  • Relying on the coordinate bench decision in W.P. No. 107545 of 2023, the Court reiterated that Section 29(2)(c) requires the competent authority to assign reasons before cancelling a registration merely on the ground of non-filing of returns for six months.
  • An order that fails to do so is one passed without application of mind and adversely affects the constitutional right to carry on business under Article 19(1)(g).
  • Since the issue stood squarely covered, the writ petition was allowed and the cancellation proceedings dated 13.03.2024 were quashed.
  • The authority was directed to restore the petitioner's certificate of registration and permit it to file returns under the GST Act.

Important Clarification

  • A bare recital that returns were not filed for a continuous period of six months, without more, does not satisfy the reasoned-order requirement of Section 29(2)(c) — cancellation orders framed this way are liable to be quashed as arbitrary.
  • Registration cancellation orders lacking application of mind are treated as impinging on the constitutional right to carry on business, strengthening the case for judicial interference even at the threshold stage.

Sections Involved

  • Section 29, CGST Act, 2017 — cancellation or suspension of registration.
  • Section 29(2)(c), CGST Act, 2017 — cancellation for non-furnishing of returns for a continuous prescribed period.

Decision – In Favour of

In favour of the Assessee — the cancellation is quashed and registration ordered restored.

Case Details

High Court of Karnataka, Dharwad Bench; Writ Petition No. 107835 of 2025 (T-RES); Coram: Hon'ble Mr. Justice M. Nagaprasanna; Order dated 15.12.2025.

Link to Download the Order

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