In a recent ruling, the Karnataka High Court has directed the GST ( Goods and Services Tax ) Department to restore a petitioner’s GST registration within four weeks, following an unjust cancellation. The court noted that the department committed a factual error.
The petitioner, A R Venugopal who had faced cancellation of their GST registration due to alleged non-submission of a response to a Show Cause Notice ( SCN ) dated October 20, 2020, challenged this decision in court.
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The petition sought to either quash the cancellation order, direct reconsideration for revocation, or condone any delay in filing the revocation application.
The petitioner’s counsel argued that the cancellation had resulted in significant hardship, as the petitioner was unable to conduct business without GST registration due to ill-health, which had delayed their response. Despite submitting a reply to the SCN on November 3, 2020, the GST registration was cancelled erroneously on the grounds of non-response.
In response, the Additional Government Advocate reiterated the various contentions urged in the Statement of Objections and submitted that there is no merit in the petition, and the same is liable to be dismissed.
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Justice S R Krishna Kumar reviewed the cancellation order and found that the GST Department had indeed made a factual error by cancelling the registration despite receiving the petitioner’s reply.
The court noted that this error warranted setting aside the cancellation order and reinstating the GST registration. Consequently, the High Court directed the GST registration be restored within four weeks, provided the petitioner files all pending returns and pays any due taxes.
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