G.R. Enterprises Vs Commissioner of Commercial Taxes (Bengaluru)
Summary : The Bengaluru Bench of the Goods and Services Tax Appellate Tribunal set aside a first appellate order that rejected G.R. Enterprises’ GST registration cancellation appeal at admission despite a Karnataka High Court direction to hear it on merits. The Tribunal held that alleged misstatements before the High Court could be raised before a competent court, and that seeking revocation under Section 30 does not amount to accepting the cancellation or bar an appeal under Section 107. The dispute concerned registration and involved no demand for tax, interest or penalty. G.R. Enterprises, a Hospet proprietorship trading in iron, steel and plastic scrap, obtained GST registration in February 2019. Officers found the declared premises closed on 20 May 2023. The detailed cancellation order referred to statements from two local residents and discrepancies between inward and outward supplies in the e-way bill data.
The show cause notice in Form GST REG-17 cited only Rule 21(a), alleging that the business did not operate from its declared premises. It gave seven working days from service to reply but fixed the hearing for 23 May 2023. The officer also initiated proceedings to block input tax credit for 2022–23 and 2023–24. The detailed order dated 14 June 2023 referred to Section 29(2)(e), recorded that the notice and credit-blocking letters were returned undelivered, and found that the appellant gave false information and traded on documents without movement of goods. It made the cancellation effective from 21 February 2019.
The portal order in Form GST REG-19 dated 15 June 2023 cited Rule 21(a) and gave 26 February 2019 as the effective date. The Tribunal directed the Appellate Authority to examine the basis for retrospective cancellation, whether the proposed date had been put to the taxpayer, and whether the notice allowed the officer to rely on findings of wilful misstatement and trading without goods. The taxpayer applied for revocation on 3 August 2023. Its consultant attended the October hearing and furnished information, but no reply was uploaded. After a second inspection in February 2024, the proper officer asked the service desk to enable approval of revocation. The service desk said that the option was unavailable without an online reply, and the officer rejected the application for that reason. The Tribunal treated the 16 March 2023 date appearing on the rejection as a slip for 16 March 2024. The taxpayer’s first appeal, dismissed on 18 April 2024, concerned that rejection of revocation. The Karnataka High Court, Dharwad Bench, set aside the 18 April 2024 order in W.P. No. 108566 of 2025 (T-RES). As the Tribunal read the High Court’s judgment, the taxpayer had four weeks from receipt to appeal against cancellation and the Appellate Authority had to decide that appeal on merits.
The taxpayer filed the fresh appeal on 19 December 2025 and produced documents at the hearing on 5 February 2026. The Appellate Authority rejected it at admission on 20 February 2026, relying on alleged misrepresentation, its view that the High Court had granted no fresh appeal, and its inference that the revocation application amounted to acceptance of cancellation. The taxpayer argued that it owned and used the premises, filed returns regularly and had replied on 14 June 2023. It cited Aggarwal Dyeing and Printing Works on the need for a particularised notice and fair hearing, and Tvl. Suguna Cutpiece Center in support of relief against cancellation. The Revenue disputed that any reply had been filed, pointed out that the earlier appeal concerned revocation, and argued that the taxpayer had mischaracterised that appeal as a time-barred challenge to cancellation. It alternatively sought re-examination on the full record. The Tribunal held that Section 107(11) requires a merits decision after any necessary inquiry, and Section 107(12) requires the points for determination, findings and reasons. The impugned order framed no point on the validity of cancellation and made no findings on the documents produced.
It was communicated in Form GST APL-02, which acknowledges an appeal. Applying Bhopal Sugar Industries and Kamlakshi Finance, the Tribunal held that the Appellate Authority had to follow the High Court’s binding directions, and that the order which the High Court set aside could no longer support the rejection. The 19 December appeal fell within the four weeks allowed by the High Court. The Tribunal left any alleged misrepresentation before the High Court to that Court. It recorded inaccuracies in the taxpayer’s pleadings, defects in the appeal memorandum and the absence of the claimed 14 June reply from the record. Those matters could affect the weight of the evidence on remand. They supplied no statutory ground to decline a merits decision. The Tribunal also distinguished the purpose of revocation under Section 30, which seeks restoration from the proper officer, from that of an appeal under Section 107, which tests whether the cancellation order was valid when made. The Tribunal remanded under Section 113(1) because deciding the merits itself would bypass the High Court’s direction and deprive both parties of a tier of factual review. Key materials from both sides were also missing. On remand, the Appellate Authority must examine service and adequacy of notice, the hearing date, compliance with Rule 25 on both visits, disclosure of adverse material, and whether business was conducted from the declared premises. It may arrange fresh verification in the appellant’s presence if necessary. Under Section 107(11), it must decide the appeal itself after any further inquiry.
The Tribunal directed the Appellate Authority to obtain the proper officer’s records and provide the inspection reports, statements, e-way bill analysis and other relied-upon material at least 15 days before the hearing. The appellant has 30 days from receipt of the Tribunal order to file its evidence. The Appellate Authority must give a personal hearing and pass a reasoned order within three months of receiving the Tribunal order. Restoration will depend on that decision. All merits contentions remain open, with no order as to costs.
Cases Discussed
- AIR 1961 SC 182 — Bhopal Sugar Industries Ltd. Vs Income-tax Officer (Supreme Court). The Tribunal relied on this decision for the duty of a subordinate authority to carry out the directions of a superior forum.
- 1992 Supp (1) SCC 443 — Union of India Vs Kamlakshi Finance Corporation Ltd. (Supreme Court, 24 September 1991). The Tribunal applied the rule of judicial discipline requiring subordinate revenue authorities to follow binding appellate orders unless their operation has been suspended.
- W.P. No. 25048 of 2021 and connected matters — Tvl. Suguna Cutpiece Center Vs Appellate Deputy Commissioner (ST) (GST) (Madras High Court, 31 January 2022). The taxpayer cited the decision in support of relief against cancellation. The Tribunal left its applicability to the Appellate Authority.
- SCA No. 18860 of 2021 and connected matters — Aggarwal Dyeing and Printing Works Vs State of Gujarat (Gujarat High Court, 24 February 2022). The taxpayer relied on the decision regarding vague notices and denial of a fair opportunity in cancellation proceedings. The Tribunal left its applicability open on remand.
- W.P. No. 101618 of 2025 (Karnataka High Court, 29 October 2025). The Revenue and the Appellate Authority referred to this order to distinguish the liberty to file a fresh appeal in another taxpayer’s case.
- 2025:KHC-D:16390, W.P. No. 108566 of 2025 (T-RES) — M/s G R Enterprises Vs State of Karnataka & Ors. (Karnataka High Court, Dharwad Bench, 25 November 2025). The earlier writ judgment in the same dispute set aside the 18 April 2024 appellate order. The Tribunal enforced the High Court’s direction to decide the cancellation appeal on merits.
FULL TEXT OF THE JUDGMENT/ORDER OF GSTAT
Introduction
1. The question involved in this appeal is whether an Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017 may decline to decide an appeal on merits after the Hon’ble High Court has directed it to do so. Three connected questions follow. The first is whether the Appellate Authority may refuse to decide because it believes that the Hon’ble High Court was misled. The second is whether a person who applies for revocation of a cancelled registration thereby accepts that the cancellation was right. The third is whether this Tribunal should decide the validity of the cancellation itself or send the matter back.
2. The appellant, M/s G.R. Enterprises, is a proprietary concern of Smt. Ghousiya Khanum at Hospet. It trades in iron, steel and plastic scrap. The respondent is the Commissioner of Commercial Taxes, Karnataka. The appellant challenges the order dated 20-02-2026 in Appeal No. KGST/AP-557/2025-26 passed by the Joint Commissioner of Commercial Taxes (Appeals), Davanagere Division (“the Appellate Authority”). That order rejected, at the stage of admission, the appellant’s appeal against the order dated 15-06-2023 cancelling its registration.
3. The provisions of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 that arise in this appeal are the same. A reference to a provision of the Central Act (“the Act”) or of the Central Goods and Services Tax Rules, 2017 (“the Rules”) includes the corresponding provision of the State law. No tax, interest or penalty is in dispute.
Facts
The cancellation
4. The appellant was registered under the GST law in February 2019 with GSTIN 29DQSPK0391H1ZB. Its statement of facts gives the date of registration as 21-02-2019. The declared place of business is Door No. 19277, Jambonatha Road, Hospet.
5. On 19-05-2023 the Joint Commissioner of Commercial Taxes (Administration), Davanagere drew up a programme for post-registration verification of places of business. Under that programme, at 1.45 p.m. on 20-05-2023, the Assistant Commissioner of Commercial Taxes, LGSTO-500, Hosapete (“the proper officer”) visited the declared place of business with two Commercial Tax Inspectors. The premises were closed. The officers called the proprietrix on the mobile number in the registration profile. They asked for the particulars and documents needed for the verification. The proprietrix was then away from Hospet. The appellant undertook to appear at the office on 22-05-2023.
6. The detailed order of 14-06-2023, referred to in paragraph 8 below, records what the officers found on their visit to the premises on 20-05-2023. The premises appeared to have been closed for many days. Much dust had gathered around them. No vehicle was seen bringing or taking goods. The room was too small to store goods in bulk. Two local residents stated that the shop had not opened since 2018, that no business was done there and that no goods vehicle had come or gone. The proper officer also noted a wide gap between inward and outward supplies in the e-way bill data. This raised a doubt whether goods were in fact received at, or sent from, the declared place.
7. On 20-05-2023, the day of the visit, the proper officer issued a show cause notice in Form GST REG-17 (Ref. ZA290523086830A). It stated a single ground under Rule 21(a): that the person does not conduct any business from the declared place of business. It called for a reply within seven working days from the date of service. It fixed a personal hearing on 23-05-2023 at 11:00 a.m. It suspended the registration from 20-05-2023. On 22-05-2023 the proper officer issued proceedings to block input tax credit for 2022-23 and 2023-24.
8. The proper officer then passed a detailed order dated 14-06-2023, styled as an order in Form GST REG-19. It records that the appellant had been asked to show cause why the registration should not be cancelled under Section 29(2)(e) with effect from 20-05-2023. It records that the appellant neither replied nor appeared on 23-05-2023. It also records that the letters sending the notice and the proceedings blocking input tax credit came back undelivered. It holds that the appellant did not conduct business from the declared place, knowingly gave false information to the Government, and traded only on documents without any movement of goods. It cancels the registration with effect from 21-02-2019.
9. On 15-06-2023 the order of cancellation was issued on the common portal in Form GST REG-19 (Ref. ZA290623075964Y). It refers to the notice dated 20-05-2023 and records that the appellant neither replied nor appeared. It gives rule 21(a) as the reason. It shows the effective date of cancellation as 26-02-2019, while the detailed order gives 21-02-2019. Both dates fall in the month of registration. Either way, the cancellation goes back almost to the date on which the registration was granted.
The application for revocation
10. The appellant did not appeal against the cancellation at that time. Instead, on 03-08-2023, it applied under Section 30 for revocation of the cancellation (ARN: AA2908230081848). The proper officer issued a notice on paper on 17-10-2023, and a notice in Form GST REG-23 (Ref. ZA291023080549C) on the portal on 18-10-2023. The notices proposed to reject the application and fixed a hearing on 21-10-2023. The notice on the portal stated only that the reason entered for revocation “is not appropriate”. It referred to a detailed notice attached to it. On 21-10-2023 the appellant’s tax consultant, Sri Ataya Rasool, appeared and furnished information. No reply was uploaded on the portal.
11. On 09-02-2024 the consultant made a written request to restore the registration. On 12-02-2024 the officers inspected the place of business again. The order that followed does not record what they found. On 26-02-2024 the proper officer raised a ticket (No. 984028) with the service desk of the departmental system. He asked that the option to approve the revocation be enabled. On 27-02-2024 the service desk replied that this option was not enabled when the taxpayer has not responded online to the query raised on the application. The proper officer then rejected the application for that reason, by an order in Form GST REG-05. The order bears the date 16-03-2023. Form GST APL-04, issued later, identifies it as the order dated 16-03-2024. The earlier date is plainly a slip.
The first round of appeal and the writ petition
12. On 27-03-2024 the appellant appealed against the order in Form GST REG-05 (Appeal No. KGST/AP-01/2024-25). The Appellate Authority acknowledged the appeal in Form GST APL-02 on 03-04-2024 and heard it the same day. By order dated 18-04-2024, summarised in Form GST APL-04 as “Rejected (Order under Appeal is Accepted)”, it dismissed the appeal.
13. The appellant then filed Writ Petition No. 108566 of 2025 (T-RES) before the Hon’ble High Court of Karnataka, Dharwad Bench. By judgment dated 25-11-2025 (NC: 2025:KHC-D:16390), the Hon’ble High Court set aside the order dated 18-04-2024. A copy of the judgment has been uploaded and is on record. The Hon’ble High Court permitted the appellant to file an appeal against the order of cancellation before the Appellate Authority within four weeks from the date of receipt of the judgment, and directed the Appellate Authority to consider that appeal on its merits. Paragraphs 5 and 6 of the judgment read:
“5. In the light of the Appellate Authority being directed to consider the appeal on its merits, the impugned order of the Appellate Authority is hereby set aside.
6. All other contentions are left open to be urged before the Appellate Authority.”
The fresh appeal and the impugned order
14. On 19-12-2025 the appellant filed a fresh appeal before the Appellate Authority against the order of cancellation dated 15-06-2023 (ARN AD291225025084A). It was registered as Appeal No. KGST/AP-557/2025-26. The statement of facts filed with it made three assertions. The registration had been cancelled because the proper officer was not satisfied with the appellant’s reply. An appeal against the cancellation had been rejected as barred by time. The Hon’ble High Court had permitted the appellant to file an appeal within four weeks. The Appellate Authority issued a hearing notice on 29-12-2025. The appellant’s Authorised Representative appeared on 05-02-2026 and produced documents.
15. By the impugned order dated 20-02-2026, the Appellate Authority rejected the appeal at the stage of admission, “both on account of lack of merits as well as on account of mis-representation of facts”. It communicated the rejection in Form GST APL-02 (Ref. ZD290226105237I) of the same date. It held that the appellant had filed no reply to the show cause notice. It held that the earlier appeal had been against the rejection of revocation and had been decided on merits, not rejected as time-barred. It found that these facts had been misrepresented before the Hon’ble High Court and before it. It held that by seeking revocation the appellant had indirectly acknowledged the correctness of the cancellation, and that the Hon’ble High Court had not permitted a fresh appeal. It observed that the appellant may have been misled by the order in Writ Petition No. 101618 of 2025, decided on 29-10-2025 in the case of another taxpayer, where a fresh appeal had been permitted. The present appeal against that order was filed within time.
Submissions of the appellant
16. It was submitted by the learned Authorised Representative that the Hon’ble High Court directed the Appellate Authority to decide the appeal on merits, and that by rejecting the appeal at the stage of admission the Appellate Authority disobeyed that direction and acted without jurisdiction.
17. It was submitted that the registration was cancelled without a hearing and without considering the appellant’s reply dated 14-06-2023. The Appellate Authority, too, did not examine the merits. The appellant has thus had no fair adjudication at any stage.
18. It was submitted that an application for revocation under Section 30 is not an admission of wrongdoing. Section 30 enables a person to set right a default. It does not bar an appeal under Section 107 against an unlawful order of cancellation.
19. It was submitted that the finding of misrepresentation has no basis in evidence. The Appellate Authority is a creature of the statute. It could not comment on the conduct of a litigant before the Hon’ble High Court. If the Revenue felt that the Hon’ble High Court had been misled, its remedy lay before the Hon’ble High Court.
20. It was submitted that the Revenue has no proof that the business did not exist. The appellant owns the premises, carried on business there and filed returns regularly. The visits for verification were neither documented nor notified as Rule 25 requires. For the plea that a registration cannot be cancelled on a notice without particulars and without a fair hearing, reliance was placed on Aggarwal Dyeing and Printing Works v. State of Gujarat (Hon’ble Gujarat High Court, Special Civil Application No. 18860 of 2021, decided on 24-02-2022). For the plea that applications for revocation should be considered liberally, reliance was placed on Tvl. Suguna Cut Piece Centre v. Appellate Deputy Commissioner (Hon’ble Madras High Court, 2022).
21. It was submitted that the impugned order be set aside, the order of cancellation be quashed and the registration be restored with continuity from the date of cancellation. In Ground D of the memorandum it was also submitted that the matter deserves to go back for a decision on the merits of the cancellation after a proper hearing.
Submissions of the respondent
22. It was submitted by the learned Authorised Departmental Representative that the appellant neither replied to the show cause notice nor appeared on 23-05-2023, as the order of cancellation records, and that the plea that the proper officer was not satisfied with a reply is untrue.
23. It was submitted that the appellant never appealed against the order of cancellation before approaching the Hon’ble High Court. It chose to seek revocation instead. That application was rejected, and the appeal against the rejection was decided on merits. The Hon’ble High Court was told that an appeal against cancellation had been rejected as time-barred. That is incorrect.
24. It was submitted that by seeking revocation the appellant accepted the cancellation. Having failed on revocation, the appellant cannot reopen the cancellation through a fresh appeal filed two and a half years after the order.
25. It was submitted that the Hon’ble High Court only set aside the order dated 18-04-2024. It did not permit a fresh appeal against the order of cancellation. The fresh appeal rested on a misreading of the judgment, possibly influenced by the order in Writ Petition No. 101618 of 2025. The impugned order is well reasoned, and the appeal should be dismissed.
26. It was submitted that, in the alternative, the matter requires a proper re-examination by the lower authorities on the full record.
Issues for consideration
27. The following issues arise for decision:
(i). Whether the Appellate Authority was justified in rejecting the appeal at the stage of admission, without deciding it on merits, despite the judgment of the Hon’ble High Court dated 25-11-2025.
(ii). Whether the alleged misrepresentation of facts before the Hon’ble High Court could be a ground for the Appellate Authority to decline to decide the appeal.
(iii). Whether an application for revocation under Section 30 amounts to acceptance of the order of cancellation, so as to bar an appeal under Section 107.
(iv). Whether this Tribunal should decide the validity of the cancellation itself or send the matter back and, if it is sent back, on what terms.
Discussion and findings
Issue (i): The direction of the Hon’ble High Court
28. Section 107 governs appeals to the Appellate Authority. Sub-sections (1), (4), (11) and (12) read:
“(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.
…
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.
…
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
…
(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.”
29. These provisions do not allow an appeal to be rejected “at the stage of admission” for want of merit. An appeal may fail at the threshold for a defect, such as delay beyond the period that sub-section (4) allows to be condoned. Merit is a different matter. It is decided under sub-section (11), after such inquiry as is needed. The order must state the points for determination, the decision on each and the reasons, as sub-section (12) requires. The impugned order says that the appeal fails for lack of merits. Yet it frames no point on the validity of the cancellation. It records no finding on the documents produced on 05-02-2026. Whatever its label, it is not a decision on merits. Its form bears this out. It was communicated in Form GST APL-02, which acknowledges an appeal, and not in Form GST APL-04, which summarises the decision on an appeal.
30. The judgment of the Hon’ble High Court leaves no doubt about what was required. It permitted the appellant to file an appeal against the order of cancellation within four weeks. The Hon’ble High Court set aside the order dated 18-04-2024 so that the Appellate Authority would “consider the appeal on its merits”. It left every other contention open “to be urged before the Appellate Authority”. The Appellate Authority had to decide the appeal on merits. It had no discretion to decline.
31. The Appellate Authority instead examined how the Hon’ble High Court came to pass its judgment. It concluded that the Hon’ble High Court had proceeded on incorrect facts submitted by the appellant. On that basis it refused to entertain the appeal. That course is not open to an authority subordinate to the Hon’ble High Court. A judgment of the Hon’ble High Court binds every authority below it until a competent court sets it aside, modifies it or suspends it. It was held by the Hon’ble Supreme Court in Bhopal Sugar Industries Ltd. v. Income-tax Officer, AIR 1961 SC 182, that when a subordinate authority refuses to carry out the directions of a superior forum, the refusal is “in effect a denial of justice”. The Court added that such a refusal strikes at the hierarchy of courts on which the administration of justice rests. It was held by the Hon’ble Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd., 1992 Supp (1) SCC 443, that the orders of higher appellate authorities must be “followed unreservedly by the subordinate authorities”. An order cannot be disregarded because the Department does not accept it, unless a competent court has suspended its operation. These principles apply with greater force to a judgment of the Hon’ble High Court under Article 226 of the Constitution.
32. The Appellate Authority also relied on its own order dated 18-04-2024, describing it as a speaking order that had already dealt with the merits. That order no longer exists. The Hon’ble High Court set it aside. An order that has been set aside cannot support any finding. Still less can it justify a refusal to hear an appeal on merits.
33. The Revenue’s main objection is that the Hon’ble High Court did not permit a fresh appeal. The judgment, which is on record, shows otherwise. The Hon’ble High Court permitted the appellant to file an appeal against the order of cancellation within four weeks from the date of receipt of the judgment, and directed the Appellate Authority to consider it on its merits. The judgment is dated 25-11-2025. The appeal was filed on 19-12-2025, within four weeks even of that date. The Appellate Authority was bound to decide that appeal on merits. Instead, it rejected the appeal at the stage of admission. The direction of the Hon’ble High Court thus remains unfulfilled.
34. The finding in the impugned order that the Hon’ble High Court did not permit a fresh appeal therefore is contrary to the judgment. It cannot justify a refusal to decide the appeal on merits. The Appellate Authority will decide, on merits, the appeal filed by the appellant against the cancellation of the registration, as permitted by the Hon’ble High Court. We answer the first issue in the negative.
Issue (ii): The alleged misrepresentation
35. Much of the impugned order deals with the appellant’s alleged misrepresentation before the Hon’ble High Court. We do not decide whether the Hon’ble High Court was given an incomplete account. That question is for the Hon’ble High Court alone. If the Revenue believed that the judgment rested on incorrect facts, it could have sought a review or recall of the judgment, or appealed against it. Nothing on record shows that it did. A quasi-judicial authority cannot sit in appeal over a judgment of the Hon’ble High Court. Nor can it refuse to act on the judgment because it doubts the facts on which it rests.
36. We must, however, record what the papers show. The appellant’s own pleadings caused much of the difficulty. The record contains no appeal against the order of cancellation filed before 19-12-2025. The appeal decided on 18-04-2024 was against the rejection of revocation. Yet the statement of facts filed on 19-12-2025 described it as an appeal against cancellation rejected as time-barred. The record does not bear that out. The status shown in Form GST APL-04, “Rejected (Order under Appeal is Accepted)”, may explain part of the confusion. It does not excuse it. The appellant also relies on a reply dated 14-06-2023 to the show cause notice. That reply is not among the papers before us. Both orders of cancellation record that none was received. The memorandum of appeal before us shows the same want of care. Ground B contains passages that argue the Revenue’s case, including that the appellant accepted the cancellation by seeking revocation and that the appeal should be dismissed. Form GST APL-05 describes the dispute as one of rejection of an application for revocation. In truth, the order appealed against arose from an appeal against the cancellation. The appellant verifies a memorandum of appeal as true. It must state the facts accurately.
37. These lapses matter. The Appellate Authority may weigh the inaccuracies in the appellant’s own pleadings when it assesses the credibility of the evidence produced. They are not, however, a ground known to the Act for refusing to decide an appeal. We answer the second issue in the negative.
Issue (iii): Revocation and appeal
38. Section 30(1) and (2) read:
“(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 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 for revocation of cancellation of the registration:
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.”
39. Sections 30 and 107 serve different purposes. An appeal under Section 107 tests whether the order of cancellation was right when it was made. An application under Section 30 asks the proper officer to restore the registration. Nothing in Section 30 requires the applicant to concede that the cancellation was correct. Nothing in Section 107 takes away the right of appeal from a person who has also sought revocation. A taxpayer may prefer revocation because it is quicker, or because it allows business to resume without a contest. That choice is not an admission of the facts alleged.
40. The Appellate Authority held that, by seeking revocation, the appellant had indirectly accepted that the cancellation was correct. We cannot agree, for the reasons just given. The only possible obstacle to the appeal against the cancellation is delay. That appeal was filed on 19-12-2025, long after the period allowed by Section 107. But it was filed within the four weeks permitted by the Hon’ble High Court. Delay is therefore no bar to its being heard on merits. We answer the third issue in the negative.
Issue (iv): Whether this Tribunal should decide the merits, and the scope of the remand
41. Section 113(1) sets out the powers of this Tribunal:
“(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the Appellate Authority, or the Revisional Authority or to the original adjudicating authority, with such directions as it may think fit, for a fresh adjudication or decision after taking additional evidence, if necessary.”
42. The appellant asks us to quash the cancellation and restore the registration. This Tribunal can decide questions of fact. We have considered whether to decide the validity of the cancellation ourselves. We have decided not to, for three reasons.
43. First, the Hon’ble High Court permitted the appellant to file an appeal against the cancellation of registration before the Appellate Authority within four weeks from the date of receipt of its judgment, and directed the Appellate Authority to consider that appeal on its merits. If this Tribunal decides the merits for the first time, it will not carry out that direction. It will replace it. Both parties would also lose a tier of appeal on facts that no appellate forum has yet examined.
44. Second, the record before us is not complete enough for a fair decision. The appellant relies on a reply dated 14-06-2023, its title to the premises, its returns and other documents. The memorandum lists them as Annexures C and H, but none of them is before us. The Revenue relies on the inspection of 20-05-2023, the statements of two local residents and an analysis of e-way bills. None of these is before us either. Nor is it shown that copies were given to the appellant. Nothing before us shows what the inspection of 12-02-2024 found. The detailed notice said to be attached to Form GST REG-23, and the information furnished by the consultant on 21-10-2023, are also not on record.
45. Third, the record raises questions on the cancellation. They must first be answered on the full record. The relevant parts of Section 29(2), rule 21 and rule 25 read:
Section 29(2): “The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,—
(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
…
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard:
…”
Rule 21: “The registration granted to a person is liable to be cancelled, if the said person,— (a) does not conduct any business from the declared place of business; …”
Rule 25: “Where the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication or due to not opting for Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification.”
46. On the cancellation, the Appellate Authority will have to examine several matters. The detailed order speaks of a notice proposing cancellation under Section 29(2)(e) with effect from 20-05-2023. The only notice on record is the one in Form GST REG-17. It cites Rule 21(a) alone, which is a ground under clause (a) of Section 29(2), not clause (e). It proposes no date of cancellation. The Appellate Authority must examine whether a separate notice was issued and served. It must also examine whether the order could rest on findings of wilful misstatement and of trading on documents without goods, when the notice on record did not put these to the appellant. The detailed order then cancels the registration from February 2019, as noted in paragraph 9, and not from 20-05-2023. The Appellate Authority must examine whether the appellant was told that cancellation from that earlier date was proposed, and whether reasons were given for choosing it. The detailed order also records that the letters sent to the appellant came back undelivered. The Appellate Authority must examine whether and how the notice was served. It must also examine whether a hearing fixed on 23-05-2023, before the time for reply had run out, gave the appellant a reasonable opportunity of being heard. It will further consider whether the verification complied with rule 25, which speaks of verification in the presence of the person. It will consider whether the report, the statements and the e-way bill analysis were furnished to the appellant, and whether the appellant replied to the notice at all. Above all, it will decide whether the appellant in fact carried on business from the declared place.
47. The record also shows that the application for revocation was rejected because no reply had been uploaded online, after the consultant had appeared on 21-10-2023, the officers had inspected the place again on 12-02-2024, and the proper officer had himself asked on 26-02-2024 that the option to approve revocation be enabled. The appeal against that rejection is not before us. The cancellation and the application for revocation turn on the same facts. How the related proceedings are to be dealt with is for the authorities to decide in accordance with law. The decisions cited by the appellant in paragraph 20 bear on the questions set out in paragraph 46. We leave them for the Appellate Authority to consider and we express no view on any of them.
48. Section 107(11) empowers the Appellate Authority to confirm, modify or annul the order appealed against, after such further inquiry as may be necessary. It does not allow the Appellate Authority to send the case back to the proper officer. The power to annul the order of cancellation therefore rests with the Appellate Authority itself. The Appellate Authority must exercise this power on a fresh examination of all the records. Neither the impugned order nor the order dated 18-04-2024, which no longer exists, may colour that examination. Sending the case back for such an examination gives effect to the direction of the Hon’ble High Court. Both sides also seek it: the appellant in Ground D of the memorandum, and the Revenue in the submission recorded in paragraph 26. The Revenue asked for re-examination by the lower authorities. Section 113(1) allows this Tribunal to send the case to the proper officer. We do not do so. A fresh adjudication by the proper officer would bypass the direction of the Hon’ble High Court and begin another round of proceedings. The Appellate Authority can, however, make any further inquiry it needs. It can call for the records of the proper officer, require the officers to explain them, and cause a fresh verification through them. The re-examination that the Revenue seeks will thus take place, under the control of the Appellate Authority and within the time fixed by this order.
49. The examination should proceed in a clear sequence. First, the Appellate Authority will call for the complete records of the proper officer. Second, it will examine whether the verifications of 20-05-2023 and 12-02-2024 were made as Rule 25 requires, and what they in fact found. If the material is insufficient, it may cause a fresh verification of the declared place of business in the presence of the appellant. Third, it will examine afresh the documents produced by both sides. It will then decide whether the appellant conducted, and now conducts, business from the declared place. It will give reasons for accepting or rejecting each material piece of evidence.
50. The Appellate Authority will then decide the appeal on merits and pass orders in accordance with law. A fair decision on the whole record is what the Hon’ble High Court sought, and what both parties are entitled to.
Conclusion
51. In the result, we pass the following order:
(i). The appeal is disposed of by way of remand.
(ii). The order dated 20-02-2026 in Appeal No. KGST/AP-557/2025-26 of the Joint Commissioner of Commercial Taxes (Appeals), Davanagere Division, communicated in Form GST APL-02 (Ref. ZD290226105237I), is set aside.
(iii). The matter is sent back to the Appellate Authority for fresh examination. The Appellate Authority shall decide the appeal on merits, as directed by the Hon’ble High Court of Karnataka in W.P. No. 108566 of 2025 (T-RES) dated 25-11-2025, and pass orders in accordance with law.
(iv). The Appellate Authority shall call for the records of the proper officer. It shall furnish to the appellant, at least fifteen days before the hearing, copies of the reports of the inspections held on 20-05-2023 and 12-02-2024, the statements recorded, the analysis of e-way bills and any other material relied upon.
(v). The appellant shall file, within thirty days of receipt of this order, all documents on which it relies. These include the reply said to be dated 14-06-2023, proof of title or possession of the premises, its returns, e-way bills and books of account. The appellant shall appear on the dates fixed and shall not seek an adjournment without sufficient cause.
(vi). The Appellate Authority shall give the appellant a personal hearing and pass a reasoned order within three months of receipt of this order.
(vii). The prayer to restore the registration is not granted at this stage. It will abide by the decision of the Appellate Authority.
(viii). Nothing in this order is an expression of opinion on whether the registration was rightly cancelled. All contentions on merits are left open.
(ix). There shall be no order as to costs.
Pronounced in Open Tribunal on this the 12th day of November, 2026.
