GST assessment remitted for fresh consideration; consequential registration cancellation set aside where additional transaction records were produced.

A summary assessment under the Karnataka GST law was remitted for fresh consideration because additional documents, including e-way bill particulars and ledger extracts, were produced to explain the alleged discrepancies and establish the genuineness of the transactions. The court held that the matter required reconsideration after giving the petitioner an opportunity to place the material on record. The consequential cancellation of registration, being based on the same factual foundation as the assessment, could not independently survive once the assessment order was set aside, and registration was directed to be restored, subject to further lawful action after reconsideration.

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Issues: (i) Whether the summary assessment order passed under Section 64 of the Karnataka Goods and Services Tax Act, 2017 required interference and reconsideration in light of additional documents produced by the petitioner. (ii) Whether the consequential cancellation of registration could survive once the assessment order was set aside.

Issue (i): Whether the summary assessment order passed under Section 64 of the Karnataka Goods and Services Tax Act, 2017 required interference and reconsideration in light of additional documents produced by the petitioner.

Analysis: The assessment was founded on inspection findings, alleged non-functioning of the business premises, and discrepancies said to show ineligible availment of input tax credit. Additional material, including e-way bill particulars and ledger extracts, was produced in the writ proceedings to explain the transactions and the alleged discrepancies. In view of this material, the assessment required reconsideration after affording the petitioner an opportunity to establish the genuineness of the transactions.

Conclusion: The assessment order was set aside and remitted for fresh consideration in favour of the petitioner.

Issue (ii): Whether the consequential cancellation of registration could survive once the assessment order was set aside.

Analysis: The cancellation of registration was treated as intertwined with the assessment order, since it was based on the same factual foundation regarding the place of business and the alleged irregularities in the transactions. Once the assessment order was interfered with and fresh consideration was directed, the cancellation order could not independently stand.

Conclusion: The cancellation of registration was set aside and the registration was directed to be restored in favour of the petitioner.

Final Conclusion: The proceedings were sent back for reconsideration on the assessment issue, while the consequential cancellation of registration was nullified and restoration of registration was ordered, with liberty to the authorities to proceed in accordance with law after considering the additional material.

Ratio Decidendi: Where an assessment is shown to rest on disputed factual inferences and additional documentary material is produced that may explain the alleged discrepancies, the matter may be remitted for fresh consideration, and a consequential registration cancellation founded on the same basis cannot survive independently.

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