OF KARNATAKA AT BENGALURU DATED THIS THE 3 RD DAY OF FEBRUARY v. ARAVIND WRIT APPEAL NO. 2040 OF 2025 (T-RES) BETWEEN

(BY SRI. ARAVIND V CHAVAN, SR. STANDING COUNSEL) …APPELLANTS - 2 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR AND: M/S. BADRIKA OVERSEAS PVT. LTD., NO.26, 2ND CROSS, KODIGEHALLI POST KUDALASANGAMA NAGAR, BENGALURU-560 091. HAVING GSTIN NO.29AALCB4003E1ZZ REPRESENTED BY ITS DIRECTOR SRI ARJUN DEWASI AGED ABOUT 33 YEARS (COMPANY REGISTERED UNDER COMPANIES ACT). (BY SMT. VEENA J KAMATH, ADV.) …RESPONDENT THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN WP NO.29743/2025 (T-RES) DATED 17.10.2025B AND PASS SUCH OTHER SUITABLE ORDERS AS THIS COURT DEEMS FIT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE K. V. ARAVIND ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K.V.ARAVIND) This intra-court appeal, filed under Section 4 of the Karnataka High Court Act, 1961, is preferred by the Revenue assailing the order passed in W.P. No. 29743 of 2025 dated 17.10.2025. - 3 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR

2. The facts in brief are that the appellants issued a show-cause notice dated 01.09.2025 proposing cancellation of the respondent’s GST registration. The respondent submitted a reply to the said show-cause notice on 08.09.2025. Upon consideration of the reply, the appellants passed an order dated 27.09.2025 cancelling the registration. The said order of cancellation was the subject matter of challenge in the writ petition.

2.1 The learned Single Judge, upon noticing that the show-cause notice was cryptic, laconic, and bereft of reasons, set aside the show-cause notice as well as the consequential order dated 27.09.2025, while reserving liberty to the appellants to issue a fresh show-cause notice in accordance with law.

2.2 This Court, by order dated 17.12.2025, granted stay of the operation of the order passed by the learned Single Judge. - 4 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR

3. Sri Aravind V. Chavan, learned Senior Standing Counsel appearing for the appellants, submits that the show-cause notice was issued after a prolonged enquiry in which the respondent had actively participated. It is contended that the grounds on which the show-cause notice was issued were well within the knowledge of the respondent and that the mere absence of detailed reasons in the show-cause notice would not, by itself, vitiate the proceedings.

3.1 It is further submitted that the respondent, having clearly understood the scope of the show-cause notice, submitted a detailed reply addressing the issues which were ultimately adjudicated upon in the order cancelling the registration. In that view of the matter, learned counsel contends that the learned Single Judge was not justified in setting aside the show-cause notice as well as the consequential order cancelling the registration. - 5 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR

4. Per contra, Smt. Veena J. Kamath, learned counsel appearing for the respondent, submits that the show-cause notice, on the face of it, does not disclose any reasons or the basis on which the respondent could effectively submit a reply. Learned counsel further submits that the reasons assigned in the order cancelling the registration are wholly unfounded and that the appellants are inconsistent in their allegations regarding the value of the transactions.

4.1 It is further contended that the proceedings initiated against the respondent are pre-determined in nature. Learned counsel submits that, notwithstanding the representation filed by the respondent seeking restoration of the registration pursuant to the order passed by the learned Single Judge, the said representation has not been considered till date. It is lastly submitted that the allegations levelled against the respondent are vague, without any factual foundation, and are not legally justifiable. - 6 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR

5. Having considered the submissions of the learned counsel appearing for the parties, we notice that the show-cause notice at Annexure-A dated 01.09.2025 merely refers to the statutory provisions and alleges that the respondent was carrying on business in violation thereof. The notice, however, does not specify the particular transactions said to be in breach of the said provisions. On an overall reading of the show-cause notice, we are of the view that the noticee would not be in a position to effectively or meaningfully respond to the allegations. In that view of the matter, the learned Single Judge was justified in setting aside the show-cause notice on the ground that it did not disclose the reasons necessary to enable the respondent to submit an effective reply.

5.1 However, learned counsel for the appellants contends that the respondent is engaged in availing bogus input tax credit from non-existent entities. It is submitted that certain registrations were obtained only for the purpose of passing on input tax credit and that such - 7 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR registrations were cancelled on the very same day. Learned counsel further submits that the respondent is involved in dubious and fraudulent input tax credit transactions.

5.2 It is contended that if the registration is restored pending adjudication pursuant to the proposed show-cause notice and until the conclusion of such proceedings, the Revenue would be put to substantial loss and the respondent would be encouraged to further indulge in fraudulent input tax credit transactions.

5.3 The aforesaid submissions alleging fraudulent availment of input tax credit are vehemently opposed by Smt.Veena J. Kamath, learned counsel appearing for the respondent-assessee.

6. We are not inclined to examine the aforesaid allegations at this stage. However, a prima consideration of the material on record indicates that the respondent-assessee cannot be permitted to seek restoration of the registration, having regard to the - 8 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR magnitude of the alleged fraudulent availment of input tax credit.

7. In our considered view, the interim order granted by this Court can be continued for a limited period, while permitting the appellants to issue a fresh show-cause notice and, upon receipt of the respondent’s reply, to conclude the proceedings in a time-bound manner. Accordingly, the following order is passed: ORDER a) Writ petition is allowed in part. b) The order of the learned Single Judge is confirmed to the extent of setting aside of show-cause notice at Annexure-A dated

01.09.2025 and the order of cancellation of registration Annexure-A1

27.09.2025. c) The appellants are at liberty to issue a fresh show-cause notice and conclude the - 9 - NC: 2026:KHC:6042-DB WA No. 2040 of 2025 HC-KAR proceedings pursuant thereto within a period of six weeks from today. d) Interim dated 17.12.2025 continued for a period of six weeks from today. e) It is made clear that, if the proceedings are not concluded within the above period, but for non-cooperation of the respondent, the appellant authorities are expected immediately restore the registration as ordered, by giving effect to the order of the learned Single Judge. Sd/- (S.G.PANDIT) JUDGE Sd/- (K. V. ARAVIND) JUDGE NC: CT:bms List No.: 1 Sl No.: 46