The Court held that the appellate authority should have gone into the factual matrix rather than dismissing the appeal on a narrow ground, and restored proceedings with liberty to demonstrate genuineness of transactions.
The Karnataka High Court has set aside the cancellation of GST registration, rejection of revocation application, and the appellate order, where the original show cause notice merely cited Rule 21(b) without furnishing any particulars of the alleged violation [M/s Goutham Constructions v. Joint Commissioner of Central Tax GST Appeals-II & Ors].
Justice B M Shyam Prasad observed that it was only at the revocation stage, through the notice in Form GST REG-23, that the petitioner was informed for the first time that its registration had been cancelled because it had claimed ineligible ITC of Rs. 8,87,014 from M/s S M Traders — found to be a non-existing or fake firm.
The petitioner's reply to the original vague SCN was not considered on the ground that an acknowledgment number was not available. The revocation application was rejected for non-response, and the appeal was dismissed without examining the factual matrix.
While the petitioner argued for quashing the SCN itself on the ground of vagueness, the Court took a pragmatic approach — noting that the petitioner was now aware of the specific allegation and was categorical that it could produce invoices and bank statements to demonstrate genuineness of transactions with the impugned firm.
Accordingly, the Court quashed all orders from the cancellation stage and restored proceedings to the SCN stage, directing that if the petitioner produces documents demonstrating genuineness, the registration must be restored.
2026-juristway.com-2937-HC(Karnataka)-GST | High Court of Karnataka | WP No. 30119 of 2026 | 29.09.2026
