M/S Vr Rice World Vs State of Karnataka — GST and Indirect Tax | Karnataka HC (2025)

M/S Vr Rice World Vs State of Karnataka — GST and Indirect Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Quashing of the show cause notice dated 05.02.2024 (Annexure-A) and the cancellation order dated 04.05.2024 (Annexure-B); the fourth respondent directed to restore the petitioner's GST registration forthwith; four weeks granted to file returns and pay tax with interest and penalty, failing which the order will not enure to the petitioner's benefit.

Issue for consideration

Whether the show cause notice dated 05.02.2024 (Annexure-A), the ex parte order cancelling the petitioner's GST registration dated 04.05.2024 (Annexure-B) and the refusal of revocation ought to be set aside and the registration restored, considering that the petitioner could not file returns for over six months due to ill-health and has offered to file returns and pay tax with interest and penalty.

Court's answer

The petitioner was not in a position to file returns for more than six months as he was suffering from ill-health, and in that circumstance could not reply to the show cause notice dated 05.02.2024, whereupon the cancellation order was passed on 04.05.2024.

Ratio / Principle

Cancellation of GST registration results in civil consequences and affects the right of the petitioner to carry on business.

Key takeaways

The writ petition is allowed.ratio¶43
Annexure-A show cause notice for cancellation of registration bearing no. ZA2902240220912 dated 05.02.2024 is quashed.ratio¶44
Annexure-B order for cancellation of registration bearing no. ZA290524016915C dated 04.05.2024 is quashed.ratio¶44

Detailed headnote1 paragraphs

High Court of Karnataka at Bengaluru (S.G. Pandit, J.), WP No. 2192 of 2025 (T-RES), decided 25.02.2025 — A GST-registered dealer (M/s. VR Rice World) who failed to file returns for over six months owing to ill-health did not reply to a show cause notice dated 05.02.2024 (Annexure-A); its GST registration was cancelled ex parte on 04.05.2024 (Annexure-B), and an application for revocation was rejected by endorsement dated 10.12.2024 (Annexure-C). Holding that cancellation of GST registration results in civil consequences affecting the right to carry on business, and noting the petitioner's offer to file returns and pay tax with interest and penalty, the Court allowed the writ petition under Articles 226 and 227 of the Constitution of India, quashed the show cause notice and the cancellation order, directed the fourth respondent to restore the registration forthwith, and granted four weeks to file returns and pay tax with interest and penalty, failing which the order would not enure to the petitioner's benefit.

1 -

NC: 2025:KHC:8320 WP No. 2192 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 25^TH DAY OF FEBRUARY, 2025

BEFORE

THE HON'BLE MR JUSTICE S.G.PANDIT

WRIT PETITION NO. 2192 OF 2025 (T-RES)

BETWEEN:

M/S. VR RICE WORLD REP. BY ITS PROPRIETOR, SRI K R RAJESH, NO.9C, GROUND FLOOR, JNANAKSHI LAYOUT, R R NAGAR HALAGEDEVARAHALLI, BANGALORE – 560062.

…PETITIONER

(BY SRI. HANJER RAGHAVENDRA BASAVARAJ, ADV.)

AND:

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

STATE OF KARNATAKA REP. BY ITS SECRETARY, DEPARTMENT OF REVENUE, VIDHANA SOUDHA AMBEDKAR VEEDHI, BANGALORE - 560001.

THE GOODS AND SERVICE TAX NETWORK (4) REPRESENTED BY ITS CHAIRMAN, EAST WING, 4^TH FLOOR, WORLDMARK-1, AEROCITY, NEW DELHI - 110 037.

THE COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARYALAYA-1, 1^ST MAIN, GANDHINAGAR BANGALORE - 560 009.

THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES

2 - NC: 2025:KHC:8320 WP No. 2192 of 2025

LGSTO-062, DGSTO-02 NO. 642, PIONEER PLAZA, KENCHENAHALLI MAIN ROAD, RAJARAJESHWARI NAGAR BANGALORE - 560098.

…RESPONDENTS

(BY SRI. K HEMA KUMAR, AGA FOR RESPONDENT 1, 3 & 4 SRI ARAVIND V CHAVAN, ADV. FOR R2)

THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED SHOW CAUSE NOTICE FOR CANCELLATION OF REGISTRATION BEARING REFERENCE NO. ZA2902240220912 DATED 05.02.2024 (ANNEXURE- A) ISSUED BY THE 2^ND RESPONDENT, THE EX PARTE ORDER FOR CANCELLATION OF REGISTRATION BEARING REFERENCE NO.ZA290524016915C DATED 04.05.2024 (ANNEXUREB) ISSUED BY THE 4^TH RESPONDENT AND THE IMPUGNED ENDORSEMENT BEARING NO. ACCT.LGSTO- 62/T.NO.549/2024-25 DATED 10.12.2024 (ANNEXUREC) ISSUED BY THE 4^TH RESPONDENT AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

Though the matter is listed for ‘Preliminary Hearing’,

with the consent of learned counsel appearing for the parties, the same is taken up for final disposal.

Heard learned counsel Sri.Hanjer Raghavendra

Basavaraj for petitioner, learned Additional Government Advocate Sri.K.Hemakumar for respondent Nos.1, 3 and 4

3 - NC: 2025:KHC:8320 WP No. 2192 of 2025

and learned counsel Sri.Aravind V. Chavan for respondent

No.2. Perused the writ petition papers.

The petitioner is before this Court questioning the show cause notice for cancellation of registration dated 05.02.2024 (Annexure-A) as well as Annexure-D order for cancellation of registration of GST dated 04.05.2024.

Learned counsel for the petitioner would submit that the petitioner is a dealer registered under the GST Act. It is submitted that the show cause notice dated 05.02.2024 was issued to the petitioner calling upon the petitioner to explain as to why registration of the GST should not be cancelled for non-filing of returns for more than six months. As the petitioner failed to reply, Annexure-B order dated 04.05.2024 cancelling the GST registration is passed. Learned counsel for the petitioner would submit that the petitioner could not file returns for more than six months due to medical reasons. Further, learned counsel would submit that the petitioner had also filed an application for revocation of cancellation, but the

4 - NC: 2025:KHC:8320 WP No. 2192 of 2025

same was rejected under endorsement dated 10.12.2024 (Annexure-C). Learned counsel for the petitioner would further submit that petitioner is ready to file the returns and also to pay the tax along with interest and penalty.

On the other hand, learned Additional Government Advocate Sri.K.Hemakumar would submit that the petitioner has failed to file returns for more than six months and as such respondents having no other option have issued show cause notice and rightly cancelled the GST registration in the absence of any reply to the show cause notice.

Having heard the learned counsel appearing for

the parties and on perusal of the writ petition papers, I am of the view that since the petitioner was not in a position to file returns for more than six months, as he was suffering from ill-health and in the said circumstance, petitioner could not replied to the show cause notice dated 05.02.2024 and as the petitioner failed to file any reply, impugned order of cancellation of GST was passed on

5 - NC: 2025:KHC:8320 WP No. 2192 of 2025

04.05.2024. The cancellation of GST registration results in

civil consequences and it affects the right of the petitioner to carry on business. Moreover, the petitioner has come forwarded to file returns as well as to pay tax due with interest and penalty, I deem it appropriate to pass the following:

ORDER

a) Writ petition is allowed.

b) Annexure-A show cause notice for cancellation of registration bearing No.ZA2902240220912 dated 05.02.2024 and Annexure-B order for cancellation of registration bearing No.ZA290524016915C dated 04.05.2024 are quashed.

c) The fourth respondent is directed to restore

the GST registration of the petitioner forthwith.

6 - NC: 2025:KHC:8320 WP No. 2192 of 2025

d) The petitioner is provided four weeks time from today to file the returns and also to pay the tax with interest and penalty.

e) If the petitioner fails to file returns and pay the tax with interest and penalty within the time stated above, this order would not enure to the benefit of the petitioner.

SD/(S.G.PANDIT) JUDGE

NC CT:bms List No.: 1 Sl No.: 20