Judgment
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF AUGUST, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 26313 OF 2026 (T-RES) BETWEEN:
M/S NOBEL ENTERPRISES REPRESENTED BY ITS PROPRIETOR SHRI. MOHAMMED SADAWATH ULLA SON OF SHRI. NOOR AGED ABOUT 37 YEARS HAVING OFFICE AT NO.52/11, KACHOHALLI VILLAGE, MAGADI MAIN ROAD LAKSHMIPURA POST DASANAPURA HOBLI BENGALURU - 562130 …PETITIONER (BY SRI. PRANAY SHARMA Y., ADVOCATE) AND:
1.
THE SUPERINTENDENT OF CENTRAL TAX WEST DIVISON-7, BENGALURU WEST COMMISSIONERATE TTMC, BMTC BUILDING, KANAKAPURA ROAD, BENGALURU, KARNATAKA -560070.
Digitally signed by VANAMALA N Location:
HIGH COURT OF KARNATAKA
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
2.
OFFICE OF THE COMMISSIONER OF CENTRAL TAX, CENTRAL REVENUE BUILDING, QUEEN'S ROAD, BENGALURU, KARNATAKA - 560001 …RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE CANCELLATION OF REGISTRATION DATED 30.07.2026 VIDE REFERENCE NO. ZA290726394855L PASSED BY THE RESPONDENT NO.1 IN FORM GST REG-19 UNDER RULE 22(3) OF THE ACT. COPY OF THE ORDER OF CANCELLATION OF REGISTRATION DATED 30.07.2026 PASSED BY THE RESPONDENT NO.1 IS ENCLOSED AND MARKED AS ANNEXURE-A1.
B) QUASHING THE SHOW CAUSE NOTICE FOR CANCELLATION OF REGISTRATION ISSUED BY THE RESPONDENT NO.1 DATED 15.07.2026 VIDE REFERENCE NO. ZA290726130679X. COPY OF THE SHOW CAUSE NOTICE FOR CANCELLATION OF REGISTRATION DATED 15.07.2026 IS ENCLOSED AND MARKED AS ANNEXURE -A2.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
ORAL ORDER
The petitioner's grievance is with the Show Cause Notice dated 15.07.2026 for the Cancellation of Registration [Annexure – A2] and with the Cancellation of Registration vide the order dated 30.07.2026 [Annexure – A1]. The petitioner is issued with the Show Cause Notice for Cancellation of Registration with a remark that this enterprise is identified in the list prepared by the Office of the Principal Chief Commissioner.
2.
The petitioner has responded to the Show Cause Notice vide reply dated 17.07.2026 only stating that the State Authorities have commenced certain proceedings and its representative is attending the case regularly. It is in the light of this response that the impugned Order for Cancellation dated 30.07.2026 is passed with a remark that the
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
petitioner's enterprise is reported to be a fake by the Office of the Principal Chief Commissioner.
3.
Mr. Pranay Sharma Y, the learned counsel for the petitioner, and Mr. Aravind V. Chavan, the learned Standing counsel for the respondents, are heard. The learned counsel for the petitioner submits that it was imperative for the concerned, to record satisfaction based upon physical verification of the petitioner's premises if there ought to be a cancellation on the ground of the enterprise being a fake enterprise but there is no such inspection, much less a recording of a satisfaction.
4.
Mr. Aravind V. Chavan, on the other hand, submits that when issued with the notice, the petitioner has only referred to the proceedings initiated by the Authorities. The question for interference is examined in the light of these two contra positions and Section 29(2) of the Central
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
Goods and Services Tax Act, 2017 [for short, ‘the CGST Act’] which reads as under.
“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 (b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or (c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or (d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or (e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts.”
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
5.
The crucial expression in Section 25(2)(e) of the Act is that a proper officer may cancel the registration of a person as he may deem fit if he is of the opinion that the registration has been obtained by means of fraud, willful misstatement or suppression of fact, but after extending a due opportunity. The Rule 25 of the CGST Rules stipulates that where the proper officer is satisfied that the physical verification of the place of the business of a person is required after the grant of registration, the officer may get the premises verified and the Verification Report along with other documents uploaded in a prescribed format on the common portal within about 15 days from the date of verification.
6.
The reason for the cancellation of the petitioner’s Registration is a list prepared by the office of the Principal Chief Commissioner, and the list is of those who are fake i.e., in the sense that they are not
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
in business but have got the registration. This Court is of the view that the proper officer, if he/she had to commence action under Section 29(2)(e) of the CGST Act based on the list prepared, ought to have ensured a physical verification of the petitioner's business premises and that if found to be a fake enterprises, taken action for Cancellation of the Registration, especially in this case where the petitioner has filed a response enclosing copies of the notices and summons issued by the State Authorities enclosing a copy of the DRC-03.
7.
Therefore, there is cause for allowing the petition quashing both the Show Cause Notice dated 15.07.2026 [Annexure – A2] and the Order of Cancellation dated 30.07.2026 [Annexure – A1], but without prejudice howsoever to the proper officer to ensure that the petitioner's business premises is verified as contemplated under Rule 25 of the GST Rules for further action.
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HC-KAR
CNR: KAHC010579072026 NC: 2026:KHC:45954 WP No. 26313 of 2026
The petition is allowed accordingly.
Sd/- (B M SHYAM PRASAD) JUDGE
RB