Faulty GST Registration Cancellation set aside

The Karnataka High Court, by its order dated 12 June 2026, allowed two writ petitions challenging cancellation of GST registrations and restored the proceedings to the stage of the show cause notices. 

The Court held that the statutory requirement of recording "reasons to believe" cannot be satisfied where the inspection reports relied upon are fundamentally defective. 

Since one report contained photographs of an unrelated property while the other was entirely blank, the cancellation and consequential suspension of GST registrations were quashed, with liberty granted to the taxpayers to submit supporting documents before the Proper Officer.