Case Law Details
Mohammed Kamran Vs Principal Commissioner of Commercial Tax (Karnataka High Court)
The Karnataka High Court set aside the cancellation of a taxpayer’s GST registration and the subsequent rejection of the application for revocation, holding that the proceedings were conducted in violation of the principles of natural justice. The petitioner challenged the cancellation order dated 10.11.2025, which was passed pursuant to a show cause notice issued on 19.09.2025. The notice stated, among other grounds, that the Directorate General of GST Intelligence (DGGI) had booked a GST fraud case against the petitioner based on a note issued by the Principal Commissioner dated 07.09.2025. The petitioner was directed to appear for a personal hearing on 23.09.2025.
The authority ultimately cancelled the petitioner’s GST registration with effect from 01.10.2025 on the ground that no reply had been filed to the show cause notice. Subsequently, the petitioner filed an application seeking revocation of the cancellation after being released on bail, but the application was rejected by an order dated 11.03.2026.
Before the High Court, the petitioner contended that he was in judicial custody from 16.09.2025 to 31.12.2025 and therefore could neither respond to the show cause notice nor attend the personal hearing. The Court noted that the petitioner’s incarceration during the relevant period was not disputed by the respondents.
Considering these facts, the Court held that the cancellation order dated 10.11.2025 had been passed in violation of the principles of natural justice because the petitioner was in custody and could not avail himself of the opportunity to respond or be heard. The Court further observed that the order rejecting the revocation application also could not be sustained, as it failed to assign any reasons regarding the alleged violation of natural justice.
Accordingly, the High Court set aside both the cancellation order dated 10.11.2025 and the revocation rejection order dated 11.03.2026. The matter was remitted to the stage of filing a reply to the show cause notice. The respondents were directed to restore the petitioner’s GST registration forthwith, while retaining liberty to continue the proceedings in accordance with law. The petitioner was directed to appear before the concerned authority on the specified date, and all contentions were kept open for consideration in the fresh proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has sought for setting aside of the order of cancellation of registration of GST at Annexure-‘B’ dated 10.11.2025.
2. It is the case of the petitioner that the show cause notice for cancellation of GST registration came to be issued on 19.09.2025 on the grounds including that the Directorate General of GST Intelligence [DGGI] had booked a case against the petitioner for GST fraud as per the note issued by the Principal Commissioner dated 07.09.2025.
3. It is further submitted that the petitioner was directed to appear before the Authority at 11.00 a.m. on 23.09.2025 and the petitioner was directed to utilise the opportunity of personal hearing.
4. It is submitted that, finally on 10.11.2025, taking note that no reply to the show cause notice has been submitted, the Authority has cancelled the GST registration of the petitioner with effect from 01.10.2025.
5. The petitioner further submits that upon being enlarged on bail, he had filed an application for revocation of cancellation of GST registration and the same came to be rejected as per the order dated 11.03.2026.
6. It is the case of the petitioner that he was in judicial custody between 16.09.2025 and 31.12.2025 and accordingly, the question of petitioner having replied to the show cause notice, much less, or availing of opportunity of personal hearing did not arise.
7. Sri Hashmath Pasha, learned Senior Counsel appearing on behalf of the petitioner submits that the petitioner was in custody between 16.09.2025 and 31.12.2025 is not controverted.
8. If that were to be so, the order passed at Annexure-‘B’ dated 10.11.2025 is an order passed in violation of the principles of natural justice in light of the petitioner having been incarcerated during the relevant period of time.
9. The order for revocation of cancellation of GST registration culminating in an order of rejection also requires to be set aside, as no reasons are assigned insofar as the violation of principles of natural justice as noticed above.
10. Accordingly, the orders dated 10.11.2025 and 11.03.2026 are set aside. The matter is remitted to the stage of reply to the show cause notice dated 19.02.2025.
11. The respondent Authorities to restore the GST registration of the petitioner forthwith. The respondents are at liberty to proceed with the proceedings.
12. The petitioner to appear before respondent No.2 on 04.05.2026 without further notice.
13. Needless to state that all contentions raised in the present petition are kept open to be raised before the respondent Authority.
Subject to the above observations and directions, the petition is disposed of.
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