Case Law Details
Mahadevappa Vs Principal Chief Commissioner of Central Tax (Karnataka High Court)
The petitioner sought quashing of the endorsement dated 12.02.2026, a direction to the competent authority to consider his representation dated 21.03.2026, and consequential reliefs.
The petitioner stated that respondent No.5, his wife, had purchased the subject property, where a hotel business was subsequently commenced. According to the petitioner, although the property stood in respondent No.5’s name, it had been purchased and the building constructed by him. Respondent No.5 executed a registered General Power of Attorney in his favour on 31.07.2018 authorising him, among other things, to carry on the business. By a consent letter dated 05.08.2022, respondent No.5 consented to registration of the business in the petitioner’s name, following which the petitioner obtained GST registration.
Following a complaint made by respondent No.5, the petitioner’s GST registration was suspended through a show cause notice dated 12.02.2026 and subsequently cancelled on 18.03.2026. The petitioner submitted a representation dated 21.03.2026 seeking revocation of the cancellation, after which the present writ petition was filed. An interim order dated 27.03.2026 kept the suspension in abeyance and directed the petitioner to pay GST returns as they fell due. Thereafter, respondent No.5 sought vacation of the interim order, while the petitioner filed applications to produce documents and amend the writ petition to challenge the cancellation order.
The petitioner contended that no opportunity of personal hearing had been granted before the impugned order. It was argued that after submission of the representation dated 21.03.2026, an opportunity of hearing ought to have been provided having regard to Section 30 of the Central Goods and Services Tax Act, 2017. The petitioner further submitted that, since the representation had not been decided, the appellate remedy under Section 107 of the CGST Act could not be invoked. It was also contended that, if a hearing had been granted, the petitioner would have demonstrated that the General Power of Attorney was coupled with interest and that registration in his name was permissible.
The official respondents submitted that the petitioner had already been issued a show cause notice on 12.02.2026, had submitted a reply on 16.02.2026, and the registration was cancelled on 18.03.2026. They contended that the representation dated 21.03.2026 was submitted only after cancellation and that the petitioner had already been afforded an opportunity by responding to the show cause notice. Accordingly, they argued that the petitioner should challenge the impugned orders before the appellate authority under Section 107 of the CGST Act. Respondent No.5 submitted that the writ petition should be rejected, alleging that the petitioner had obtained the interim order by suppressing facts and that she had lodged a complaint alleging forgery of her consent, in respect of which an FIR had been registered. The petitioner disputed these allegations, stating that the consent had been given in 2022 and that the complaint was lodged more than three years later after deterioration of their relationship.
The Court noted that the GST registration stood in the petitioner’s name, that it had been suspended pursuant to the show cause notice dated 12.02.2026, that the petitioner had replied to the notice on 16.02.2026, and that the registration was cancelled on 18.03.2026 before the petitioner submitted his representation dated 21.03.2026. The Court observed that, notwithstanding the dispute between the petitioner and respondent No.5, the official respondents were required to decide the matter in accordance with the statutory provisions governing registration and cancellation.
The Court referred to Sections 29 and 30 of the CGST Act relating to cancellation, suspension and revocation of cancellation of registration, including the proviso to Section 30(2), and also to Section 75(4), which provides for an opportunity of hearing where requested in writing or where an adverse decision is contemplated. The petitioner relied upon these provisions in support of his contention that a hearing ought to have been granted on his representation.
The Court also referred to Section 107 of the CGST Act, which provides that any person aggrieved by any decision or order may appeal to the appellate authority. It held that, since the petitioner had been issued a show cause notice, had replied to it, and the registration had thereafter been cancelled, the availability of an appeal against “any order” under Section 107 meant that the writ petition need not be entertained. The Court rejected the contention that the appellate remedy was unavailable merely because the representation had not been considered. Holding that it was not expedient to invoke its extraordinary jurisdiction under Article 226 of the Constitution of India, the Court disposed of the writ petition with liberty to the petitioner to avail the appellate remedy under Section 107 of the CGST Act. All contentions on merits were kept open, and the pending interlocutory applications were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The present writ petition is filed seeking for the following reliefs:
“Wherefore, the petitioner most respectfully prays that this Hon’ble Court may be pleased to:
A. Issue a writ in the nature of certiorari quashing the Impugned Endorsement dated 12.02.2026 issued by Respondent No.4 bearing No. GSTIN/UIN:29ABWPH889A1ZW vide Annexure-F, in the interest of justice and equity.
B. Issue a writ in the nature of mandamus directing the Respondent No.4 to consider the representation vide Annexure-H dated 21.03.2026 bearing GSTIN No.GSTIN/UIN:29ABWPH8896A1ZW in the interest of justice and equity.
C. Grant such other and further reliefs as this Hon’ble Court deems fit and proper in the facts and circumstances of the case, including costs of this petition, in the interest of justice and equity.”
2. The relevant facts, in nutshell, leading to the present petition are that respondent No.5 is the wife of the petitioner. The property measuring 01 acre in Sy.No.135/3B, situated at APMC cross near Charintimath layout, Bagalkotl, was purchased by respondent No.5 vide a registered Sale Deed dated 17.06.2008, and a building was constructed thereafter on the subject property. A hotel business under the name and style of “Haripriya International Lodging, Boarding and Restaurant” was commenced in the subject property.
3. It is the case of the petitioner that, since the petitioner was employed, the subject property was purchased in the name of respondent No.5 and that the building was also constructed by the petitioner. That a registered General Power of Attorney dated 31.07.20182 (Annexure-A to the writ petition) was executed by respondent No.5 in favour of the petitioner, authorizing the petitioner, inter alia, to carry on the business in the subject property.
4. It is the case of the petitioner that, vide consent letter dated 05.08.2022 (Annexure-E to the writ petition), respondent No.5 had consented to the registration of the business carried out in the subject property being made in the name of the petitioner. Consequent thereto, the petitioner was registered with the concerned tax authorities.
5. Pursuant to a complaint made by respondent No.5 to the tax authorities3, the GST license issued in the name of the petitioner was suspended pursuant to show-cause notice dated 12.02.2026 (Annexure-F to the writ petition). Subsequently, the registration of the petitioner was cancelled on 18.03.2026 (Annexure-G to the writ petition). The petitioner submitted a representation dated 21.03.2026 (Annexure-H to the writ petition) seeking for revocation of the cancellation. Thereafter, the present writ petition was filed seeking for the reliefs as noticed above.
6. This Court, vide interim order dated 27.03.2026, ordered as under:
ORAL ORDER
“Counsel Sri.F.V.Patil., for the petitioner has appeared in person.
Counsel Sri. Girish S. Hulmani., is directed to accept notice on behalf of respondents 1 to 4.
Issue notice to respondent No.5.
Process to be paid within a week’s time.
Counsel for the petitioner is directed to serve copy of the Writ Petition along with all Annexures to counsel for respondents.
Heard on interim relief.
Counsel Sri.F.V.Patil submits that the fifth respondent is the wife of the petitioner and she has given a consent letter to register the GST in the name of the petitioner. However, due to some family disputes, she raised a complaint and requested the authority concerned to cancel the GST registration. He further submits that the petitioner undertakes to pay the GST returns, hence, the suspension of the GST may be stayed.
Taking note of the said submission, the suspension of the GST be kept in abeyance. The petitioner is directed to pay GST returns as and when they fall due.”
7. The respondent No.5 has filed I.A.No.2/2026 seeking for vacation of stay. Subsequently, the petitioner has filed I.A.No.3/2026 for production of documents and I.A.No.4/2026 seeking to amend the writ petition seeking to impugn the order of cancellation dated 18.03.2026.
8. Heard submissions of learned counsel appearing for the petitioner, learned counsel appearing for respondents No.1 to 4 – official respondents and learned counsel appearing for respondent No.5 – private respondent.
9. It is the vehement contention of the learned counsel for the petitioner that, before the impugned order was passed, no opportunity of personal hearing was afforded to the petitioner. That subsequent to the representation dated 21.03.2026 (Annexure-H to the writ petition), having regard to Section 30 of the Central Goods and Services Tax Act, 20174, an opportunity of personal hearing ought to have been afforded to the petitioner. That the representation not having been decided, the petitioner would not be entitled to invoke the appellate remedy provided under Section 107 of the CGST Act. That the ground for suspension and cancellation of the registration was that the registration was made in the name of the petitioner, who was the GPA holder. Hence, it is contented that, if an opportunity of hearing was afforded, the petitioner would have demonstrated that the GPA was one coupled with interest and, therefore, it was open for the petitioner to be registered with the statutory tax authorities.
10. Per contra, learned counsel for respondents No.1 to 4 – official respondents submits that the registration of the petitioner was suspended on 12.02.2026 (Annexure-F to the writ petition) by way of a show-cause notice, consequent to which the petitioner submitted his reply on 16.02.2026. Thereafter, the registration was cancelled on 18.03.2026 (Annexure-G to the writ petition). It is consequent to the said cancellation that the petitioner submitted the representation dated 21.03.2026 (Annexure-H to the writ petition). Hence, it is submitted that, the petitioner having been afforded an opportunity of hearing and having submitted his reply dated 16.02.2026, the orders impugned in the present writ petition are liable to be challenged before the appellate authority as contemplated under Section 107 of the CGST Act.
11. Learned counsel for respondent No.5 – private respondent submits that the writ petition is liable to be rejected since the petitioner, by suppressing the relevant facts, obtained the interim order dated 27.03.2026. That the said interim order was granted on the ground that respondent No.5 had given her consent for registration of GST in the name of the petitioner, whereas a complaint has been lodged by respondent No.5 alleging that her consent has been forged by the petitioner, in respect of which an FIR has been registered.
12. Rebutting the submissions made on behalf of respondent No.5, learned counsel for the petitioner contends that the consent of respondent No.5 was given on 05.08.2022 itself, consequent to which the GST registration was made in the name of the petitioner and the petitioner was running the business for more than three years. That, since the relationship between the petitioner and respondent No.5 has deteriorated due to various factors, the complaint has been made by respondent No.5 after lapse of more than three years alleging forgery.
13. The submissions made by both the learned counsels have been considered and the material record has been perused.
14. The relevant factual matrix is undisputed inasmuch as the GST registration in respect of the business carried out in the subject property stands in the name of the petitioner. It is further a matter of record that the said GST registration was suspended pursuant to the show-cause notice dated 12.02.2026 (Annexure-F to the writ petition). It is forthcoming from the representation dated 21.03.2026 (Annexure-H to the writ petition) given by the petitioner that, the petitioner had also submitted his reply to the show-cause notice on 16.02.2026. Thereafter, the order of cancellation was passed on 18.03.2026 (Annexure-G to the writ petition).
15. Notwithstanding the inter-se dispute between the petitioner and respondent No.5, the official respondents are required to consider and decide in accordance with the relevant statutory provisions with regard to the aspect pertaining to the registration of the petitioner or the cancellation of the same thereof.
16. Reliance is placed by the learned counsel for the petitioner on Sections 29 and 30 of the CGST Act.
17. Section 29 of the CGST Act contemplates the procedure for Cancellation [or suspension] of registration. Section 30 of the CGST Act stipulates for Revocation of cancellation of registration. The said Section 30 of the CGST Act reads as under:
30. Revocation of cancellation of registration
(1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in 2[such manner, within such time and subject to such conditions and restrictions, as may be prescribed.]
[ * * * *]
(2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application:
PROVIDED that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard.
[PROVIDED FURTHER that such revocation of cancellation of registration shall be subject to such conditions and restrictions, as may be prescribed.]
(3) The revocation of cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a revocation of cancellation of registration under this Act.
18. Reliance is also placed by the learned counsel for the petitioner on Section 75(4) of the CGST Act. Section 75 of the CGST Act stipulates the general provision relating to determination of tax. Sub-section (4) of Section 75 stipulates that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
19. It is the contention on behalf of the petitioner that, the petitioner having submitted a representation dated 21.03.2026, he ought to have been provided an opportunity of hearing, which is specifically contemplated under the proviso to sub-section (2) of Section 30.
20. In this context, it is pertinent to note that Section 107 of the CGST Act contemplates an appeal to the appellate authority. Sub-section (1) of Section 107 reads as under:
“107. Appeals to Appellate Authority
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an Adjudicating Authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.”
(emphasis supplied)
21. It is clear from the aforementioned that an appeal could be filed by “any person”, if he is aggrieved by “any decision or order” under the provisions of the Central Goods and Services Tax Act or the State Goods and Services Tax Act.
22. In the facts of the present case, admittedly, the show-cause notice dated 12.02.2026 has been issued suspending the registration made in favour of the petitioner, which was replied on 16.02.2026. Further, the registration of the petitioner was cancelled vide the order dated 18.03.2026. Thereafter, the representation dated 21.03.2026 has been made by the petitioner.
23. Although it is the vehement contention of the learned counsel for the petitioner that the representation is required to be considered and opportunity of hearing is required to be afforded before the aspect of revocation is considered, having regard to the purport of the wordings of Section 107 of the CGST Act that “any order” could be challenged, the question of entertaining the present writ petition for the purpose of adjudicating the issues sought to be urged by the contesting parties does not arise.
24. The contention put forth on behalf of the petitioner that an appellate remedy would not lie since the representation has not been considered is unmerited. As noticed above, in view of the wordings contained in Section 107 of the CGST Act that “any order” could be called in question before the appellate authority, it is expedient, in the facts of the present case, that the extraordinary discretionary jurisdiction contained under Article 226 of the Constitution of India to grant the relief as sought for in the present petition is not invoked.
25. In view of the aforementioned, the writ petition is disposed of reserving liberty to the petitioner to avail the appellate remedy as contemplated under Section 107 of the CGST Act.
26. All contentions of the parties, on the merits of the matter, are kept open.
27. In view of disposal of the petition, pending I.As, if any, stands disposed of.
Notes:
1 Hereinafter referred to as the ‘subject property’
2 Hereinafter referred to as the ‘GPA’
3 Hereinafter referred to as the ‘official respondents’
4 Hereinafter referred to as the ‘CGST Act’
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