Karnataka HC Directs GST Dept to Restore Wrongly Cancelled Registration in 4 Weeks

A.R. Venugopal Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
In the case of A.R. Venugopal Vs Assistant Commissioner of Commercial Taxes, the Karnataka High Court addressed the wrongful cancellation of the petitioner’s GST registration. The petitioner, A.R. Venugopal, sought relief after his GST registration was canceled despite submitting a response to a Show Cause Notice (SCN). Due to personal health issues, the petitioner delayed submitting the reply to the SCN dated October 20, 2020, but he managed to file it by November 3, 2020. However, the Assistant Commissioner of Commercial Taxes proceeded with the cancellation, citing non-submission of a response. This left Venugopal unable to conduct business and led him to challenge the decision in court.
Upon review, the High Court found that the cancellation order was based on a factual error since the petitioner had indeed filed his response, and the GST registration should not have been canceled. The Court set aside the cancellation order and directed the GST department to reinstate the petitioner’s registration within four weeks. This reinstatement is contingent upon the petitioner submitting all pending returns and clearing any outstanding taxes. The ruling highlights the importance of correct administrative procedures and the severe consequences of incorrect registration cancellations.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, the petitioner seeks the following reliefs:
“A. Issue a writ of certiorari or orders or direction in the nature of certiorari quashing the cancellation of the registration with reference No.ZA2911200185305 Order passed by the respondent dated 20/10/2020 (Annexures A) AND
B. Issue a writ of mandamus directing the respondent to reconsider the petitioner’s case for revoking the cancellation of Registration dated 20/10/2020 with reference No ZA2911200185305. (Annexure-A)
OR
C. Issue a direction or order condoning the delay in filing the revocation Application.”
2. The learned counsel for the petitioner submits that due to ill-health, the petitioner could not submit his response to the Show Cause Notice dated 20.10.2020 as a result of which, the respondent has proceeded to cancel the GST Registration of the petitioner, who is before this Court by way of the present petition. It is submitted that the cancellation of the GST Registration of the petitioner has resulted in irreparable injury and hardship to the petitioner, and the petitioner is not in a position to continue his business without GST Registration. It is therefore submitted that cancellation of GST Registration of the petitioner may be directed to be restored and further directions be issued in this regard.
3. Per contra, the learned Additional Government Advocate would reiterate the various contentions urged in the Statement of Objections and submits that there is no merit in the petition, and the same is liable to be dismissed.
4. A perusal of the impugned Cancellation Order dated 20.10.2020 [Annexure-A] will indicate that after having noted that the petitioner has filed his reply on 03.11.2020 to the Show Cause Notice dated 20.10.2020, the respondent clearly fell in error in canceling the GST Registration on the ground that the petitioner had not submitted his reply/response to the Show Cause Notice. In view of the aforesaid factual error committed by the respondent in the impugned order, I am of the view that the impugned order canceling the GST Registration of the petitioner deserves to be set aside, and the GST Registration of the petitioner be restored/reinstated subject to the petitioner filing the returns and pay up to date taxes. In the result, the following:
ORDER  
a The petition is allowed.
b The impugned order dated 20.10.2020 [Annexure-A] passed by the respondent – the Assistant Commissioner of Commercial Taxes is hereby set aside.
c The respondent is directed to restore/reinstate the GST Registration of the petitioner within a period of four [4] weeks from the date of receipt of a copy of this order subject to the petitioner filing the GST returns and paying up to date taxes, if any, to the respondent.