Facts of the Case

The petitioner, an electrical and civil works contractor executing works for the Karnataka Power Transmission Corporation Limited (KPTCL), had its GST registration cancelled with effect from 30.01.2019 for continuous default in filing returns for over six months, following a show-cause notice dated 03.12.2018. The petitioner explained that it had relied on its Auditor for GST compliance and only later discovered, through a new Auditor, that the earlier Auditor had passed away in October 2017, resulting in returns going unfiled from 2017 onwards; meanwhile, payments from KPTCL for completed work had also not been released, causing financial hardship. Both an application to revoke the cancellation and a subsequent appeal (GST AP 431/24-25) were rejected, the latter by order dated 24.10.2024.

Issues Involved

  1. Whether a GST registration cancelled for prolonged non-filing of returns should be restored where the taxpayer explains the default and expresses readiness to regularise compliance.
  2. On what terms and timeline such restoration should be conditioned.

Petitioner's Arguments

  • The default in filing returns arose from circumstances beyond the petitioner's immediate control (the responsible Auditor's death), and the petitioner was now ready and willing to file all pending returns and deposit tax dues, interest and penalty if granted reasonable time.
  • Clarified via a memo that outstanding tax liability pertained only to FY 2017-18 and 2018-19, that it was willing to comply with assessment orders for FY 2021-22 to 2024-25, and that no assessment orders had yet been passed for FY 2019-20 and 2020-21.

Respondent's Arguments

  • The Joint Commissioner (Appeals) had confirmed the cancellation and the endorsement declining to entertain the revocation application; no separate contest is recorded once the petitioner's detailed memo and assurance were placed before the Court.

Court Order / Findings

  • Recording the petitioner's statement and assurance regarding regularisation of tax filings and deposits, the Court showed indulgence and allowed the writ petition.
  • The appellate order dated 24.10.2024, the underlying cancellation order, and the endorsement declining revocation were all quashed and set aside, with the matter remitted to the second respondent for reconsideration.
  • The petitioner was granted four weeks to file all pending returns and deposit tax dues with applicable interest and penalty; failing which the cancellation would stand automatically revived without further reference to the Court. On compliance, the GST registration would stand restored, with liberty reserved to submit explanations before the concerned authority.

Important Clarification

  • Courts continue to grant a final, time-bound compliance window to restore a long-cancelled GST registration where the taxpayer offers a genuine explanation for the default (such as reliance on a since-deceased professional) and demonstrates readiness to clear all outstanding dues — with automatic self-revival of the cancellation built in as a safeguard if the taxpayer fails to comply.

Sections Involved

  • Section 29, GST Act, 2017 — cancellation of registration for continuous default in filing returns.
  • Section 30, GST Act, 2017 — revocation of cancellation of registration.

Decision – In Favour of

The order is in favour of the Assessee. Restoration of GST registration was directed, conditional on filing pending returns and clearing dues within four weeks.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 12470 of 2025 (T-RES)
Neutral Citation: 2025:KHC:20494
Coram: Hon'ble Mr. Justice Sachin Shankar Magadum
Date of Order: 16th June, 2025

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