GST Registration Cancelled Due to Non-Operation at Declared Place and Wrongful ITC Availment: Karnataka HC Quashes Order Citing Non-Consideration of Documents [Read Order]

In a recent ruling, the Karnataka High Court quashed an order passed by the revenue authorities that rejected an application for the revocation of cancelled GST registration. The Court set aside the order on the grounds that the authorities failed to consider the documents furnished by the petitioner and did not extend the opportunity of a personal hearing.

The petitioner, Javeed Pasha, proprietor of M/s A.M. Scrap Traders, filed a writ petition challenging the cancellation of his GST registration and the subsequent rejection of his application for revocation. The authorities had cancelled the registration based on a Show Cause Notice (SCN) dated 27.03.2026, which alleged that the petitioner was not conducting any business from the declared place of business and was wrongfully availing Input Tax Credit (ITC). This conclusion was drawn following a visit to the petitioner's premises on 26.03.2026, where it was found that no business activity was taking place.

The petitioner’s counsel, K. M. Shivayogiswamy, argued that the petitioner was out of town due to family issues during the inspection and had not been served with the SCN. He contended that the cancellation was erroneous and urged the Court to interfere, seeking liberty for a re-inspection of the premises.

Conversely, the Standing Counsel for the respondents, Aravind V. Chavan, submitted that even if there were errors in the process, the Court should only interfere with the rejection order dated 08.05.2026 and restore the matter to the adjudicating authority for fresh consideration.

The Single Judge Bench comprising Justice B M Shyam Prasad observed that the factual aspects regarding whether the business was closed temporarily or permanently required verification based on submitted documents. The Court noted that the order of rejection was "wanting" because the petitioner had filed several applications along with the revocation request, which the authorities failed to consider. Furthermore, the Bench highlighted the necessity of extending a personal hearing to the petitioner before deciding on the revocation.

Allowing the petition in part, the High Court quashed the order dated 08.05.2026. The Court restored the proceedings to the second respondent, directing the authority to provide the petitioner with a personal hearing on or after 16.06.2026 and to decide on the revocation request by 30.06.2026.