Girish K Vs State of Karnataka & Ors. (Karnataka High Court)
Summary: The Karnataka High Court at Bengaluru partly allowed the writ petition filed by Sri Girish K challenging cancellation of his GST registration by order dated 16 July 2024. Justice B. M. Shyam Prasad quashed the cancellation order and restored the proceedings to the Assistant Commissioner for reconsideration, giving the petitioner an opportunity to respond to the show cause notice. The petitioner stated that he had filed nil GST returns for the period April 2021 to July 2023, despite which a notice was issued in June 2023 alleging non-filing. He further asserted that his auditor had not informed him about the cancellation and that he was unaware of it. The show cause notice did not specify the period for which returns were allegedly missing, and the cancellation order recorded only ‘others’ as the reason without furnishing particulars.
The petitioner expressed willingness to file returns and pay interest and penalty, subject to consideration of the input tax credit available in his electronic ledger. The Court considered that the vague notice and unexplained cancellation warranted a fresh opportunity to show cause. It directed the Assistant Commissioner to examine all relevant circumstances, including whether available ITC could lawfully be used for payment of penalty and interest, without deciding that question conclusively.
The petitioner was directed to respond to the show cause notice dated 6 June 2023, supplying details of nil returns and returns for subsequent months, by 15 October 2026. The order also mentioned a challenge to a separate notice dated 20 September 2025, but did not separately grant relief against that notice. The petition was allowed in part, with reconsideration ordered rather than unconditional final restoration of registration.
Related TaxGuru reading: Vague GST cancellation notices and orders; GST show-cause notice and cancellation rules. These are contextual links, not cases cited by this order.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner’s grievance is with the Order of cancellation of GST registration dated 16.07.2024 [Annexure-A] and the question that is examined by this Court for interference with this Order is: whether this Court must restore the proceedings with liberty to the petitioner to show cause against the proposition to cancel the GST registration. Mr. Purnachandra M Puranik, the learned counsel for the petitioner and Ms. Malavika Prasad, the learned High Court Government Pleader for the respondents, are heard for a decision on the afore question.
This Court opines that the answer to the afore question must be in the affirmative for the following reasons.
[A] The petitioner’s case is that he has filed ‘Nil’ Returns for the months between April 2021 and July 2023, but Notice is issued in June 2023 stating that Returns have not been filed.
[B] The petitioner asserts that his Auditor did not inform him about the cancellation of the GST registration and therefore he was not aware of the cancellation.
[D] The petitioner is willing to offer the amount of penalty and interest subject to set off towards the ITC that stands to his credit in the Electronic Ledger, and the petitioner will also file Returns.
[D] The Show Cause Notice refers to the petitioner’s failure to file Returns without specifying the period and the petitioner’s case is that he had filed ‘Nil’ Returns for the relevant period.
[E] The impugned order, insofar as the reason for the cancellation, only records as “others” without specifying anything in detail.
In these circumstances, this Court opines that the petitioner must have an opportunity to show cause against the cancellation of the GST registration and as part of such consideration, the second respondent must also examine whether the petitioner must be permitted to avail ITC to discharge the penalty and interest. Hence, the following.
ORDER
[A] The petition is allowed-in-part.
[B] The second respondent’s impugned Order of cancellation of registration of GST dated 16.07.2024 [Annexure-A] is quashed restoring the proceedings to the second respondent for reconsideration.
[C] The petitioner shall file his Response to the Show Cause Notice dated 06.06.2023 [Annexure-C] furnishing the details of the ‘Nil’ Returns filed and the Returns for the succeeding months as well.
[C] This Court also observes that the second respondent shall consider all circumstances and pass just Orders permitting the petitioner to pay penalty and interest, and if permissible using the ITC that is to the petitioner’s account.
[D] The petitioner shall file his Response with the details as aforesaid by 15.10.2026 with the second respondent.
