M/S. Garuda Traders vs. Superintendent Of Central Tax

Held

The Court held that the impugned order dated 06.08.2026 for the cancellation of GST registration was passed in a mechanical manner without proper application of mind and without dealing with the contentions, submissions, and documents filed by the petitioner. The Court found that the respondent failed to consider the petitioner's reply, additional submissions, and supporting documents. The Court also noted the absence of a proper enquiry, including physical verification, by the respondent authorities. Consequently, the impugned order was set aside. The matter was remitted back to the respondent No.1 to pass a fresh order after hearing the petitioner and its representative, duly considering the reply, additional submissions, and documents. The respondent was directed to decide strictly in accordance with the materials on record, without being influenced by any previous observations.

Facts

The petitioner, M/s. Garuda Traders, challenged an order dated 06.08.2026 passed by the Superintendent of Central Tax, Nagole GST Range, cancelling its GST registration. A show cause notice dated 24.06.2026 had been issued, stating the registration was suspended from 11.07.2025. The petitioner submitted a reply on 29.06.2026 and made additional submissions during a personal hearing on 06.07.2026, along with supporting documents. The petitioner contended that these submissions and documents were not considered by the respondent before passing the cancellation order. The petitioner also argued that the respondent failed to conduct a proper enquiry, including physical verification of the premises, to ascertain if the business was operational and if input tax credit was availed in accordance with law. The petitioner had previously withdrawn a writ petition challenging the show cause notice with liberty to file a fresh one.

Key Issues

1. Whether the cancellation of the petitioner's GST registration was in gross violation of the principles of natural justice and the petitioner's fundamental right to freedom of trade under Article 19(1)(g) of the Constitution of India, as argued by the petitioner? The petitioner contended that the impugned order was passed mechanically without proper application of mind, failing to consider the reply, additional submissions, and supporting documents. The petitioner argued that the respondent ought to have conducted a proper enquiry, including physical verification of the premises and surrounding areas, to ascertain the petitioner's business operations and input tax credit claims, which was not done. The respondents did not record any specific arguments in the judgment.