Judgment
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF SEPTEMBER, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 26674 OF 2026 (T-RES) BETWEEN:
M/S SRI HOLERANGA TRAVELS REPRESENTED BY SHRI UMESH NT NO. 30, KEREKODI MAIN ROAD, D'SOUZA LAYOUT, HOSAKEREHALLI, BANASHANKARI 3RD STAGE, BENGALURU 560 085 …PETITIONER (BY SRI. HARISH VASHISTH., ADVOCATE) AND:
1.
UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI - 110 001.
2.
PRINCIPAL COMMISSIONER OF CENTRAL TAX, BENGALURU WEST COMMISSIONERATE, BMTC BUILDING, FIRST FLOOR, BANASHANKARI, KANAKAPURA ROAD, BENGALURU - 560 070.
Digitally signed by VANAMALA N Location:
HIGH COURT OF KARNATAKA
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
3.
ADDITIONAL COMMISSIONER OF CENTRAL TAX (ADJUDICATING AUTHORITY), BENGALURU WEST COMMISSIONERATE, BANASHANKARI, BENGALURU - 560 070.
4.
SUPERINTENDENT OF CENTRAL TAX, RANGE DWD-1, WEST DIVISION-1, BENGALURU WEST COMMISSIONERATE, BENGALURU - 560 070.
…RESPONDENTS (BY SRI.ARAVIND V CHAVAN., ADVOCATE)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER-IN-ORIGINAL NO. 74/2024-25- GST DATED 20.08.2024 PASSED BY THE 3RD RESPONDENT (ANNEXURE - A); QUASHING THE SHOW CAUSE NOTICE NO. 31/2023-24 DATED 19.02.2024, OF RESPONDENT 4 AT ANNEXURE-B;
IN THE ALTERNATIVE, TO ORDER OR DIRECT, UPON SETTING ASIDE THE IMPUGNED ORDER, TO REMAND THE MATTER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW, AFTER EFFECTIVE SERVICE OF THE SHOW CAUSE NOTICE AND A REASONABLE OPPORTUNITY OF FILING A REPLY AND OF PERSONAL HEARING.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner has called in question the following:
Sl.
No.
Notices/ Orders Date Provisions of CGST Act, 2017 Annexures 1 Show Cause Notice 19.02.2024 74 B 2 Order-in- Original 20.08.2024 74 A
Sri Harish Vashisth, the learned counsel for the petitioner, canvasses the following as against the impugned Show Cause Notice and the Order-in- Original.
[A] The petitioner's GST registration is cancelled suo motu by the State Tax Authorities in March 2023 and this undoubtedly denies the petitioner access to the GST portal.
[B] As such, the petitioner could not access the Show Cause Notice or the Summary of the
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
Show Cause Notice which are dated 19.02.2024 and 06.08.2024 respectively.
[C] The petitioner with the cancellation of the GST registration has informed the respondents and even the Central Authorities about the change in address but the petitioner has not been served with Notices or served with copies of the Show Cause Notice/Summary of the Show Cause Notice at this address.
[D] The petitioner was issued with a summons in February 2023 prior to the cancellation of the GST registration, and in this very month the petitioner, because there was a bona fide error in claiming excess GST, has duly reversed such excess claim.
The learned counsel submits that in the light of this, the proceedings could not have been initiated under
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
Section 74 of the Central Goods and Services Tax Act, 2017 [for short, ‘the Act’] as there will be no occasion for allegations of misrepresentation of fraud or misstatement.
2.
Sri Aravind V Chavan, a learned standing counsel who accepts notice for the respondents, is heard on whether this Court must interfere to restore the proceedings for due consideration leaving open all questions including questions on whether the proceedings could have been initiated under Section 74 of the Act and if not, whether the proceedings could be continued for an adjudication under Section 73 of the Act.
3.
The Show Cause Notice is for the tax period between July 2017 to September 2022. The petitioner, upon cancellation of the GST registration, has communicated the change in address and has ensured that the Authorities are informed about the
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
address for communication. The Show Cause Notice refers to the cancellation of the petitioner's GST registration in March 2023 by the State Authorities and also refers to the above. The proceedings have culminated in the Adjudication Order with the Authority observing that though the Intimation is sent to the petitioner, no Reply is furnished.
4.
The Adjudicating Authority’s observation as regards the opportunity under the Show Cause Notice and the opportunity of personal hearing in the Order-in-Original reads as under.
“11.1 Accordingly, an intimation in Form DRC-01A dated 01/02/2024 (Annexure-9) bearing DIN:
20240257YU000016781B was sent to the taxpayer under Rule 142(1A) of the CGST/SGST Rules, 2017 communicating the GST liabilities to be paid as discussed above and also requesting to file their submission, if any, in the prescribed format within 7
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
days. However, no reply has been received yet from the taxpayer in this regard.
13. The noticee is required to produce at the time of showing cause all the evidences upon which they intend to rely in support of their defence. They are also required to indicate to the adjudicating authority in writing as to whether they wish to be heard in person before the case is adjudicated, failing which it will be construed that they do not wish to be heard in person.”
5.
This Court is persuaded to opine that, in the afore circumstances and the fact that the petitioner asserts that there is a voluntary reversal of the bona fide excess ITC claim even before the proceedings could be initiated, is persuaded to opine that the petitioner must have an opportunity to show cause against the proceedings being continued under Section 74 of the Act or being culminated under Section 73 of the Act on the propositions in the Show
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
Cause Notice. Hence, leaving all questions open as regards the afore, the petition stands disposed of by the following.
ORDER [A] The petition is allowed in-part.
[B] The second respondent’s impugned Order-in-Original dated 20.08.2024 [Annexure-A] is quashed restoring the proceedings to the second respondent for reconsideration with liberty to the petitioner to file a detailed Response to the Show Cause Notice dated 19.02.2024/Summary of the Show Cause Notice dated 06.08.2024.
[C] The petitioner is reserved with liberty apart from the afore to also show that the proceedings cannot be continued even for a culmination under Section
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CNR: KAHC010574102026 NC: 2026:KHC:47692 WP No. 26674 of 2026
73 of the Act because of the purported infirmities in the Show Cause Notice dated 19.02.2024.
[D] The petitioner shall file the response as aforesaid by 15.10.2026.
Sd/- (B M SHYAM PRASAD) JUDGE AN/-