Email of GST Show-Cause Notice Went Unnoticed: Karnataka HC Grants One More Opportunity and Restores Registration

The Karnataka High Court has granted relief to a taxpayer whose GST registration was cancelled after the taxpayer failed to respond to a show-cause notice.

In Deepa Enterprises and Contractors v. Joint Commissioner, Office of the Commissioner of Central GST and Central Excise, Belagavi & Anr., the Court adopted a justice-oriented approach and set aside the cancellation of the petitioner's GST registration. The Court directed the authorities to restore the registration, subject to the taxpayer filing pending GST returns and paying the applicable tax, interest and penalty within the stipulated period.

The order was passed by Hon’ble Mr. Justice S.R. Krishna Kumar on 27 August 2026.

Facts of the Case

The petitioner, Deepa Enterprises and Contractors, had obtained GST registration on 24 March 2022.

Thereafter, the GST authorities issued a show-cause notice dated 13 August 2024. The notice was sent to the petitioner by email. However, according to the petitioner, the communication went unnoticed and no reply could be submitted within the prescribed time.

The authorities subsequently passed an order dated 18 September 2024, cancelling the petitioner's GST registration on the ground that no reply had been filed against the show-cause notice.

The petitioner approached the Karnataka High Court challenging the cancellation order and sought, inter alia, quashing of the show-cause notice and the order cancelling the GST registration.

Contentions Before the Court

Before the High Court, the petitioner submitted that the failure to respond to the show-cause notice was not intentional.

It was specifically submitted that, due to bona fide reasons, unavoidable circumstances and sufficient cause, the petitioner could not respond to the notice.

The petitioner also submitted that, if the cancellation order was set aside, it would undertake to file the pending GST returns and pay the up-to-date tax dues.

High Court's Observations

After considering the submissions and the material on record, the High Court took note of the petitioner's specific assertion regarding the circumstances that prevented it from responding to the show-cause notice.

The Court adopted a justice-oriented approach and considered it appropriate to set aside the impugned cancellation order and remit the matter to the concerned respondents, thereby providing the petitioner with one more opportunity.

This approach enabled the taxpayer to regularise its GST compliance while also preserving the authority of the GST department to ensure payment of the applicable statutory dues.

The Court's Decision

The High Court allowed the writ petition and passed the following directions:

1. The writ petition was allowed.
2. The GST registration cancellation order dated 18 September 2024 was quashed.
3. The respondents were directed to reinstate/restore the petitioner's GST registration within four weeks.
4. Restoration was made conditional upon the petitioner:
   • filing GST returns;
   • paying up-to-date tax;
   • paying applicable interest; and
   • paying applicable penalty.

The above compliance was required to be completed within four weeks from the date of receipt of a copy of the order.

GST Case Law Deepa Enterprises And Contractors Versus The Joint Commissioner

Citation-2026 TAXONATION 2319 (KARNATAKA)

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