The Karnataka High Court has set aside the cancellation of a taxpayer’s GST registration after finding that the action had been taken when the petitioner was in judicial custody and therefore could not effectively respond to the show cause notice or avail the opportunity of personal hearing.
The bench of Justice S. Sunil Dutt Yadav observed that the cancellation amounted to a violation of principles of natural justice and directed immediate restoration of the GST registration.
The petitioner had sought quashing of the registration cancellation on the ground that the proceedings had been carried out despite his inability to participate due to incarceration.
According to the case record, a show cause notice proposing cancellation of GST registration had been issued on September 19, 2025. The notice referred to a case allegedly booked by the Directorate General of GST Intelligence (DGGI) against the petitioner for GST fraud pursuant to a communication from the Principal Commissioner dated September 7, 2025. The petitioner had also been directed to appear before the authority for personal hearing on September 23, 2025.
Subsequently, on November 10, 2025, the authorities cancelled the GST registration with effect from October 1, 2025 after observing that no reply had been filed to the show cause notice.
The petitioner argued before the Court that he had remained in judicial custody from September 16, 2025 until December 31, 2025. Consequently, he contended that there was no practical possibility of replying to the notice or attending the hearing fixed by the department during that period. After being released on bail, he moved an application seeking revocation of the cancellation; however, that application was rejected on March 11, 2026.
During the hearing, the petitioner’s counsel submitted that the fact of incarceration between September 16 and December 31, 2025 was not disputed by the respondents. The Court took note of this aspect and considered it significant while examining the legality of the cancellation proceedings.
The High Court observed that where a person was in custody during the relevant period, the question of responding to notices or appearing for hearings naturally did not arise. It therefore concluded that the cancellation order had been passed in breach of procedural fairness and fundamental principles of natural justice. The Court also found fault with the subsequent rejection of the revocation request, noting that no reasons had been assigned regarding the contention of denial of natural justice.
The Court set aside both the cancellation order dated November 10, 2025 and the order dated March 11, 2026 rejecting revocation. It remitted the matter back to the stage of filing a reply to the show cause notice and directed the authorities to restore the GST registration immediately.
At the same time, the Court clarified that the tax authorities would remain free to continue proceedings in accordance with law and all contentions of both parties were kept open. The petitioner was directed to appear before the concerned authority on May 4, 2026 without any further notice.
Case Details
Case Title: Shri Mohammed Kamran Versus The Principal Commissioner Of Commercial Tax
Citation: JURISHOUR-1398-HC-2026(KAR)
Case No.: Writ Petition No. 6450 Of 2026 (T-Res)
Date: 01/05/2026
Counsel For Petitioner: Hashmath Pasha, Senior Advocate
Counsel For Respondent: Jeevan J. Neeralgi, Advocate
Read More: Karnataka High Court Quashes Ex-Parte Service Tax Demand Based on CBDT Inputs
