Diya Distributors vs. The Deputy State Tax Officer

WP/2681/2026HC TelanganaGSTCNR HBHC01002005202602 February 2026Bench: APARESH KUMAR SINGH,G.M. MOHIUDDIN7 pages

For Petitioner: SRI GAJANAND CHAKRAVARTHY REPRESENTING, SRI UPADHYAY RAGHAVENDERFor Respondent: SRI SWAROOP OORILLA', SPECIAL GP FOR STATE TAX

AI SummaryRemanded

Facts

The petitioner, Diya Distributors, filed a writ petition challenging the cancellation of its GST registration by the Deputy State Tax Officer. The cancellation, effective from March 23, 2024, was based on the ground of filing Nil returns. The cancellation was made retrospective from March 31, 2021. The petitioner claimed it was unaware of the show cause notice and cancellation proceedings because its tax professional failed to inform it. Consequently, its purchasing dealers were denied Input Tax Credit, leading to demands for GST refund from the petitioner. The petitioner attempted to file for revocation of cancellation but was prevented by the GST portal's time limit. The petitioner sought directions for manual acceptance of its revocation application and restoration of its GST registration.

Held

The Court noted that the petitioner's GST registration was cancelled for filing Nil returns. The petitioner expressed willingness to pay any outstanding dues and attributed the non-compliance to their tax professional. The primary issue was the petitioner's inability to file a revocation application due to portal limitations. The Court acknowledged the submissions of both parties. The Court directed that if the petitioner approaches the competent authority within one week from the date of the order for submission of an application for revocation of cancellation of GST registration in physical form, the competent authority shall entertain it and take a decision in accordance with law within three weeks thereafter. The writ petition was disposed of accordingly.

Key Issues

1. Whether the retrospective cancellation of the petitioner's GST registration is ultra vires Section 29 of the Central Goods and Services Tax Act, 2017, and consequently illegal, arbitrary, unconstitutional, and void under Articles 14, 19(1)(g), 21, and 265 of the Constitution of India? Petitioner's arguments: The petitioner contended that the cancellation was arbitrary and illegal. They argued that the GST portal did not permit filing a revocation application beyond the prescribed time limit. They sought a direction for the respondent to manually entertain their revocation application and decide it in accordance with the law. Respondents' arguments: The Special Government Pleader for State Tax submitted that if the petitioner approached the competent authority, its application could be entertained manually, as the GST portal had time limitations. The competent authority would consider the application in accordance with law.

Sections Cited

Section 29

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Between: DIYA DISTRIBUTORS, Represented bY AGARWAL, Aged about 25 Years, Occ. Compound, Balanagar, Hyderabad - 500037. [ 3488 ] its proprietor Miss. SHIKSHA Business, 11-6-27l1lB, Sunship ...PETITIONER IN THE HIGH COURT FOR THE STATE OF TELANGANA (Special Original Jurisdiction) MONDAY,THE SECOND DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH ANI) THE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WRIT PETITION NO: 2681 OF 2026 AND 1 2 3 The Deputy State Tax Officer, Office of the Asst. Commissioner (ST), _ Fatehnagai Circle, 2nd Floor, South Wing, Gaganvihar Building, Opp Gandhi Bhavan, Nampally, Hyderabad - 500001. The Commissioner of State Tax, State of Telagnana Commercial Taxes Complex, M J Road, Opposite Gandhi Bhavan, Nampally, Hyderabad. The State of Telagnana, Represented by its Principle Secretary to Government, Revenue CTD, Secreteriate, Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to a. lssue a Writ of Certiorari or any other appropriate Writ, Order or Direction quashing the Cancellation Order dated 23.03.2024 vide Reference No. 2A36O324054294N passed by the Respondent No.1, cancelling the GST Registration of the Petitioner bearing GSTIN 36DHHPA7385F1Z8, including the retrospective cancellation from 31/03/2021 , b. Declare that the impugned cancellation of GST Registration is ultra vires Section 29 of the Central Goods and Services Tax Act, 2017 and is illegal, arbitrary, unconstitutional and void, being contrary to Articles 14, 19(1Xg), 21 and 265 of the Constitution of lndia, c. Direct restoration of GST Registration forthwith and permit filing of pending returns, and d Pass such other order or orders as this Honourable Court deems fit in the interests of .lust ce IANO:1O F 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filt:d in support of the petition, the High Court may be pleased to dispense with :he filing of original/ certified copy of the order dl' 231O312024 in Reference No. 2A3602324054294N on the file of the tespondent's office' IA NO: 20F 2026 Petition :nder Section 151 CPC praying that in the circumstances stated in the affidavit fil€d in support of the petition' the High Court may be pleased to stay all further pro<;eedings including any recovery' pursuant to the cancellation of order dt 23ll3t2)24vide Reference No2A3602324054294N and also not to take any coercive steps against the petitioner till pending disposal of Writ petition' Counsel for the Petitioner: SRI GAJANAND CHAKRAVARTHY REPRESENTING SRI UPADHYAY RAGHAVENDER Counsel for the Respondents No 1 & 2 : SRI SWAROOP OORILLA' SPECIAL GP FOR STATE TAX. Counsel for the Respondent No 3 : GP FOR REVENUE

The Court made the following: ORDER

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON' E THE CHTEI.'JUSTICII SRI At,AIIESI{ KTJMAR SI N(; I.I ANI) THE HON' SRI JUSTICE G TUDDIN WRIT PETITION No.2 681 of 2026 Dated: 02.02.2026 Iletween: Diya Distributors ...Petitioner antl 'Ihe Deputy State'l'ax Oftrcer, Office o['the Asst. Cornmissioner (S1'), Fatehnagar Circlc, 2"d Floor, South Wing, Gaganvihar Building, Opp. Gandhi Bhavan, Nampally, [{yderabad - 500 001, and2 others. ... Respondents ORDER: I-earned counsel Sri Gajanand Chakravarthy, rcprcsenting Icarned counsel Sri Upadhyay Raghavender, appears lbr the pctitioner. Sri Swaroop Oorilla, learned Special Government Pleadcr for State Tax, appears for the respondents.

The Goods and Services Tax (GST) registration certificate of the petitioner bearing No.36DHHPA7385Fl28 \4/as cancelled vidc irnpugned order passed in Form GST REG-19 dated 23.03.2024 on the 2 I i ground of liling NII- return. l'hereafter, the petitioner has filed the instartt 'Nrit petition for revocation of cancellation of GST registration ccrt i li ca te .

Learrled counsel fbr the petitioncr subrnits that all outstanding dues, if an1. rvould be paid.'fhe petitioner had entrusted all GST' corru-spondetrcc to its tar proflessiorral/consultant rvho did not inlorrn thc pctitiorrcr regarding the shou cause notice or the cancellatiorr proccedings altd the petitioner carne to know of the cancellation onlr s'hett its purchasing dealcrs recerrtly informed that due to retrospcctiyc cancellation. rhcir Input 'fax Crcdit is bcing denied and they arc being cornpelled to pay the GS]- again resulting in dernands being raised on the pctiti,.rner fbr rcfirnd of GS-r' arrcacry paid. Though the petitioner has sought t<l filc an application for revocation of cancellation of GSI' rcgistrati<>rl ccrtif,lcatc but the GS-l' portal does not perrnit the petitioncr as being llevond the tirne lirrrit prescribecl for submission. Therefore, the petitiorrer pra-vs that respondent No.l rnay be directed to enterlain the pctitioner's application manuallv and take a decision thereupon in accordance with law. 4- Leirtted Special Government Pleader for State Tax submits that if the petitioner is directed to approach respondent No.l/competent i (

- J authority, its application can be entertained manually as the GST porlal does not permit submission of apptication beyond the prescribed tirne lirnit. It is also subrnitted that the competent authoritl" ivould consider the application in accordancc rvith larv.

Having regard to the aforesaid facts and circumstances. if the petitioner approaches the competent authority r'vithin a pcriod ot'one u,eek ttonr todal' lor submission o[' application fbr revocation of cancellation ol' GS't' registration certificate in ph1'sical form- tl-re competeltt authority would entertain it and take a decision thereupon in accordance rvith larv r,vithin a period of three rvecks thereatter.

The instant writ petition is accordingly disposed of' There shall be no ordcr as to costs. Miscellaneous applications pencling. ilany, shall stand closcd K. MADHA AS TANT REG // ON OFFICER To,

The Deputy State Tax oJficer, ^office of the Asst. Commissioner(ST), Fatehnas a,. circr!,' ino-Fiil,' g;l!{ryir.rgl biginuinrr Bu i ld ing, opp Gand h i bh;r;;,"Nampally, HYderabad - 5oooo1

The Commissioner of State.Tat State of Telagnana CommercialTaxes Complex, U I fi"'rOlbpp".ii. G;;hi A6rrin] Nampally, Hyderabad'

The Principle secretqry 1o Government, Revenue cTD, State of Telagnana' Secreteriate, HYderabad' 4.oneCCtoSRl.UPADHYAYRAGHAVENDER,Advocate[oPUC]

Two,CCs to Gp FOR REVENUE, High cpurt for the State of Telangana at Hyderabad. [OUT]

6 Two CCs to SPECIAL GP FOR SfATE TAX, High'Court for the State of Telangana at Hyderabad. [OUT]

Two C[) Copies DAN tls 'd+-

HIGH COI.'RT DATED i01'.10212026 ORDER WP.No.2681 of 2026 STAIE 2 $ fEB 202[ oo * J. t DISPOSIING OF THE WRIT PETITION WITHOUT COSTS J$ \,tr"

Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.