Manikanta Electronics Services Center vs. State Of Telangana
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The petitioner, Manikanta Electronics Services Center, challenged an order dated 22.04.2024 and a rectification order dated 26.11.2025, issued by the Assistant Commissioner (ST) and Deputy State Tax Officer, respectively. The impugned order imposed tax liability and penalty for the period 2018-19. The petitioner's GST registration was voluntarily cancelled on 16.07.2021, with zero tax liability declared at that time. The petitioner argued that after cancellation, there was no reason to continuously check the portal. The show cause notice was issued after three years of registration cancellation. The petitioner also sought suspension of the attachment of his bank account. The petitioner had not appeared for hearings despite notices.
Held
The Court held that the cancellation of GST registration does not absolve a taxpayer of any existing liability for periods prior to cancellation. The impugned order dealt with tax liability for 2018-19 due to failure to declare correct input/output taxes, necessitating a notice under Section 73 of the Act. The petitioner was served with a show cause notice along with DRC-01 and DRC-03, and despite reminders and personal hearings, did not file a reply. Therefore, the assessing authority was justified in imposing tax and penalty. The Court found no infirmity in the impugned order requiring interference. However, the petitioner was granted liberty to prefer an appeal within two weeks, subject to statutory pre-deposit, which the appellate authority would consider in accordance with law. The writ petition was disposed of accordingly.
Key Issues
1. Whether the impugned order dated 22.04.2024, imposing tax liability and penalty for the period 2018-19, is violative of the principles of natural justice and contrary to the provisions of the CGST Act, 2017 and Telangana GST Act, 2017, especially considering the prior cancellation of the petitioner's GST registration on 16.07.2021. Petitioner's contention: The petitioner argued that after voluntary cancellation of registration with zero tax liability, the issuance of the impugned order after three years was unjustified. They also contended that if the matter were remanded, they could defend themselves properly. They relied on the Allahabad High Court's decision in M/s. Katyal Industries v. State of UP. Revenue's contention: The revenue argued that cancellation of registration under Section 29(3) of the CGST Act, 2017, does not extinguish prior liabilities. They further submitted that the petitioner had an obligation to check the portal for intimations and did not appear for hearings even during rectification proceedings. They suggested the petitioner prefer an appeal against the impugned order.
Sections Cited
Section 29(3), Section 73, Rule 142(2), Rule 142(3), Section 161
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER
IN THE HIGH COURT FOR THE STATE OF TELfu\GAI\A AT HYDERABAI) THE HON'BLE THE CHIEF JUSTICE SRI APARESH KT'MAR STNGH AND TIIE HON'BLE SRI JUSTICE G.M.MOIIIUDDIN WRIT PETITIO No. 1362 of 2026 DATED : 19.01.2026 Behveen: Manikanta Electronics Services Center Petitioner AI\D State of Telangana, Department of Commercial Tax, Represented by its Secretary and three others ... Respondents ORDER: Sri Kailash Nath P S S, learned counsel appears for petrtloner Sri Swaroop Oorilla, learned Special Government Pleader for State Tax appears for respondent Nos.l to 3. 2. The order dated 22.04.2024 imposes tax liability along with penalty upon the petitioner for the period 2018-19 which has been assailed in the instant Writ Petition primarily on ttre ground that after cancellation of his GST registration on j 16.07.2021 on voluntary application, indicating zero tax t
iiCJ {.\rrS. i) & G\lII, J ..al*P .\-o. I362 of 2026 liability, there was no reason for the petitioner to keep checking upon the portal. The order impugned has been passed pursuant to the show cause notice dated 23.01.2024 after three (3) years of cancellation of his registration. The petitioner had sought voluntary cancellation of registration as his business of installation and servicing of electronic appliances was not encouraging. The application for rectification has also been rejected on 26.11.2025 on the ground that the petitioner is seeking reexamination of the entire subject matter which is not within the scope of Section l6l of the Goods and Services Tax Act, 2017 (for short 'the Act'). The petitioner had also not appeared for hearing despite notice.
The learned counsel for the petitioner submits that if the matter is remanded, the petitioner would be able to properly defend himself before the Proper Officer. He has relied upon the decision of Allahabad High Court in the case of I\[/s. Katyal Industries v. State of UP and two othersl in support of his submissions. 2 r 'zoz+121'rMr 1447 (
3 HCJ (AKrS, -Il E; Gllll, i W.P.No.1362 oi 2O2b
The iearned Special Government Pleader for State Tax submits that in terms of Section 29(3) of the central Goods and Services Tax Act, 20.17, cancellation of registration does not wipe out any liability which may be {etected for the period prior to the cancellation. The petitioner also cannot claim to have no obligation to check the portal where the impugned order was duly intimated. Even during the proceedings of rectification, he did not appear for hearing despite notice. He submitted that the petitioner may prefer an appeal against the irnpugned order with all grounds of law and on facts as may be available to him which may be considered by the appellate authority in accordance with law
We have considered the submissions of the learned counsel for the parties and taken note of the materials placed on record.
We are of the considered view that cancellation of registration does not absolve the taxpayer of any existing \, liability which the petitioner may have to face. The order
4 rC.i r.\lrS. -i! -"r G\:il..; \ii.P.\o. i )5) oi 2026 impugned deals with tax liability for the period 2018- l9 on the ground that he had failed to declare coffect input/output taxes in his returns which warranted a notice under Section 73 of the Act. A show cause notice was also served upon him along'with DRC-01 under Rule 142(2)1142(3) of the central Goods and Services Tax Rules, 20[7, through common portal calling for objections and also an option to pay the tax shown in the notice in DRC-03 by 23.02.2024. Despite a remainder notice, the taxpayer did not file any reply. Three/four reminders and personal hearing were also given. Therefore, the assessing authority proceeded to impose tax and penalty for the relevant period.
Having regard to the aforesaid facts and circumstances, we are unable to accept the contention of the petitioner that the impugned order suffers from any infirmity which requires interference for reconsideration. However, the petitioner has a liberty to prefer an appeal taking all grounds of law and on facts. If he prefers such appeal within a period of two (2) (
iicJ {Ar&S, Jt & C!r{},r. J 1[.P.No.1362 of 2026 .A.JAYASREE ASSISTAhIT REGISTRAR SECTION OFFICER ////
The Secretary, Department of Commercial Tax, T BM 5 weeks with statutory pre-deposit, the appellate authority would consider it in accordance with taw. The instant Writ Petition is accordingty disposed of. There shail be nc order as to costs. Miscellaneous applications, if any pending, shafl stand closed To,
The Assistant Commissioner (ST), Warangal Urban-ll, Warangal ! Tle_Deputy State Tax Officer, Warangal Urban-ll, Warangal
IDFC First Bank, Warangal Branch, and GS Compll-ex, Nakkala Gutta, _ Warangal, Hanamkonda - 506001 Rep by its Branch Manager
One CC to SRl. KAILASH NATH P S S, Advocate [OPUC]-
Two CCs to SPECIAL GPFOR THE STATE IAX, High Cburt for the State of Telangana, at Hyderabad [OUTI
Two CD Copies M. PMK I \
HIGH COURT DATED:I9/01 12026 x THI Ii I 1 O FEB Z/Jt{d :ia \ ORDER wP.Nd.B62 0t 2026 DISPOSING OF THE WRIT PETITION WITHOUT COSTS \ i), () )- * * t'\
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.