Sri. Madhusudhan Reddy L vs. The State Of Karnataka
Held
The Court found the petitioner's reasons for not responding to the show cause notice bona fide, especially given the voluntary ITC reversal. It quashed the ex-parte adjudication order and the garnishee notice, remanding the matter for fresh consideration after allowing the petitioner to file a detailed explanation and proof of ITC reversal.
Facts
The petitioner challenged an ex-parte adjudication order issued under Section 73(9) of the CGST and KGST Act, 2017, demanding tax, interest, and penalty for wrongful ITC claims for FY 2021-22, along with a subsequent garnishee notice. The petitioner claimed to have voluntarily reversed the ITC but failed to respond to the show cause notice due to responding to other simultaneous notices.
Key Issues
The key legal issue was whether an ex-parte adjudication order, confirming a demand for wrongful ITC claims, should be sustained when the taxpayer claims to have voluntarily reversed the ITC and offers bona fide reasons for not responding to the show cause notice.
Sections Cited
Section 73(9)
AI-generated summary — verify with the full judgment below
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HC-KAR
CNR: KAHC010626642026 NC: 2026:KHC:49146 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF SEPTEMBER, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 28412 OF 2026 (T-RES) BETWEEN:
SRI. MADHUSUDHAN REDDY L S/O. LAKSHMI NARAYAN REDDY, AGED ABOUT 56 YEARS, PROPRIETOR OF M/S. KUNDAN TRANSPORT, R/AT NO. 29/2A2B, SHREE LAKSHMI NILAYA, PURVA BELMONT GATE, KANAKAPURA ROAD, JARAGANAHALLI, J.P.NAGAR, BENGALURU - 560 078. …PETITIONER (BY SRI. SUBRAHMANYA DATTATRAY, ADVOCATE) AND:
THE STATE OF KARNATAKA REP. BY THE PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHAN SOUDHA, BENGALURU - 560 001. 2. JOINT COMMISSIONER OF COMMERCIAL TAXES, (LEGAL AFFAIRS), COMMERCIAL TAX BUILDING, KALIDASA MARG, GANDHI NAGAR, VANIJYA THERIGE KARYALAYA, BENGALURU - 560 009. VANAMALA N Location: HIGH COURT OF KARNATAKA HC-KAR
CNR: KAHC010626642026 NC: 2026:KHC:49146
DEPUTY COMMISSIONER OF COMMERCIAL TAXES,
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