M/S South INDIA Company vs. The Commissioner Of Commercial Taxes

It is further submitted that such of the suppliers i.e., M/s. MRK Enterprises has suffered an order of cancellation of GST registration and was a shell entity. Observation is made regarding physical verification of the registered premises of M/s. MRK Enterprises and it is stated that the registered premises of M/s. MRK Enterprises was locked and that there was no infrastructure commensurate with the scale of operations as claimed in the GST returns. It was further observed that the proprietor had replied when contacted over telephone that no transactions and business activities were being carried on for the past two years. On the basis of such observation and material, show-cause notice was issued regarding cancellation of registration and the GST registration of M/s. MRK Enterprises was also cancelled. HC-KAR NC: 2026:KHC:20316

Sri. K. Hemakumar, learned Additional Government Advocate would assert that the adjudicating authority after taking note of all material including the modus operandi of fraud as asserted by the authority, the assessing officer has rejected the withdrawal of summary assessment order.

Learned counsel for the petitioner has filed memo of additional documents dated 01.04.2026 and points out that the suppliers of the petitioner were indeed genuine. It is submitted that the additional documents would indicate that the supplies of the petitioner were in fact genuine and the details regarding e-way bill, value, vehicle number and quantity had been produced relating to the relevant year. It is submitted that if the authority were to re-look into the matter and re-appreciate the evidence on record, case would be made out to drop the proceedings. HC-KAR NC: 2026:KHC:20316

Learned Additional Government Advocate would point out to the detailed finding of the authority including the modus operandi of fraud as detailed in para-5 and submits that no case is made out by the petitioner for exercise of discretionary power under the present juri iction.

Perused the order at Annexure-E, whereby the authority has rejected the application to withdraw the summary assessment order passed. No doubt serious allegations have been made against the petitioner and observation regarding examination and rejection of the contention has been made. However, noticing the additional documents produced along with the memo dated 01.04.2026, as well as another memo, it would be appropriate that the assertion of the petitioner by relying on such documents could be the subject matter of reconsideration by the authority. Such order is passed by putting the petitioner on terms, noticing if the order is allowed to stand, serious prejudice would be caused to the HC-KAR NC: 2026:KHC:20316 petitioner. The question of the genuineness of the documents produced is a matter for enquiry by the authority.

Accordingly, the order at Annexure-E is set aside and matter is remitted for reconsideration of the application for withdrawal of summary assessment order. Petitioner to appear before respondent No.3 without further notice on 18.05.2026. 9. The authority may take note of the additional documents produced by the petitioner herein. Petitioner upon appearance is at liberty to produce other materials to substantiate his claim that the suppliers are genuine and demonstrate that ITC availed of, is in order.

Petitioner to pay cost of Rs.25,000/- to the Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru.

Liberty is reserved to the authority upon considering additional materials placed by the petitioner to HC-KAR NC: 2026:KHC:20316 pass orders under Section 73 and Section 74, as is permissible in law. All legal contentions are kept open. Accordingly, petition is disposed of. (S SUNIL DUTT YADAV) JUDGE MCR