The Karnataka High Court has quashed both a show cause notice and an order cancelling GST registration under Section 29(2)(e) of the CGST Act where the sole basis for cancellation was the petitioner's name appearing on a list of "fake enterprises" prepared by the Office of the Principal Chief Commissioner — without any physical verification of the business premises. Justice B.M. Shyam Prasad, in M/s Nobel Enterprises v. Superintendent of Central Tax (WP No. 26313/2026, decided 25.08.2026), held that Rule 25 of the CGST Rules, which requires physical verification of business premises, must be complied with before cancellation on grounds of fraud or misrepresentation.
The court noted that Section 29(2)(e) permits cancellation where "registration has been obtained by means of fraud, wilful misstatement or suppression of facts" — but only after extending due opportunity and arriving at satisfaction that the enterprise is indeed fake. A list prepared by a higher authority, without independent verification at the field level, cannot substitute for this statutory requirement. The ruling is particularly significant given the ongoing nationwide drive against fake registrations under 'Operation Clean Money' and similar initiatives, where bulk lists are generated centrally and action taken without case-specific verification. The court reserved liberty for the proper officer to conduct fresh physical verification under Rule 25 and take further action if warranted.
2026-juristway.com-1139-HC(Karnataka)-GST | High Court of Karnataka | Writ Petition No. 26313 of 2026 | 25.08.2026