M/S. Sreekar Sales And Services vs. Deputy State Tax Officer

Facts

M/s. Sreekar Sales and Services (the petitioner) filed a writ petition challenging the suo motu cancellation of its GST registration by the Deputy State Tax Officer (Respondent No. 1) on 26.11.2024. The petitioner contended that this action was illegal, arbitrary, and violated its fundamental right to carry on business under Article 19(1)(g) of the Constitution of India, as well as Section 37(5) of the CGST Act and the Telangana GST Act. The petitioner sought to set aside the cancellation order and prayed for the suspension of the order and revival of its GST registration pending the disposal of the writ petition, citing potential severe loss and hardship. The amount in dispute was not explicitly stated. The procedural history involves the filing of the writ petition and an interlocutory application for interim relief.

Held

The Court disposed of the writ petition by granting liberty to the petitioner to file an application before the respondent No. 2 (Deputy State Tax Officer, Cherlapally Circle) for revocation of the cancellation of its GST registration in physical form within one week from 07.10.2026. Respondent No. 2 was directed to consider this application and take a decision in accordance with the law within three weeks from the date of filing. The Court noted that the issue involved in this matter was identical to that in W.P. No. 7176 of 2026, where a Coordinate Bench had granted similar liberty. The reasoning was based on the simultaneous circumstances of both matters and the precedent set by the Coordinate Bench. The Court did not make any specific findings on the legality or arbitrariness of the cancellation order itself, nor did it delve into the merits of the petitioner's constitutional or statutory arguments. The operative direction was to allow the petitioner to pursue the revocation process.

Key Issues

1. Whether the suo motu cancellation of the petitioner's GST registration by the respondent No. 1 is illegal, arbitrary, and in contravention of Article 19(1)(g) of the Constitution of India and Section 37(5) of the CGST Act and the Telangana GST Act? Petitioner's Arguments: The petitioner argued that the cancellation of its GST registration was illegal, arbitrary, and violated its fundamental right to carry on business. It also contended that the action was contrary to Section 37(5) of the CGST Act and the Telangana GST Act. Respondents' Arguments: The respondents placed reliance on an order passed by a Coordinate Bench in a similar writ petition (W.P. No. 7176 of 2026). This order granted liberty to the petitioner therein to approach the respondent No. 1 for submission of an application for revocation of cancellation of GST registration and directed the respondent to consider such application within a specified period. The respondents indicated that the issue in both matters was identical, concerning the cancellation of GST registration for failure to file returns for six consecutive months.