Judgment
- 1 -
HC-KAR
CNR: KAHC010511022026 NC: 2026:KHC:46883 WP No. 23240 of 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF AUGUST, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 23240 OF 2026 (T-RES) BETWEEN:
M/S SRI VINAYAKA ELECTRICALS A SOLE PROPRIETORSHIP, HAVING ITS PLACE OF BUSINESS AT NO. 109, WARD 17, KOARACHARA COLONY, KR EXTENSION, MADHUGIRI, TUMAKURU, KARNATAKA - 572 132, REPRESENTED BY ITS PROPRIETOR, MR. NAGARAJ AGED ABOUT 44 YEARS, S/O NARAYANAPPA, RESIDING AT NO. 16, 2ND MAIN ROAD, KUNIGAL ROAD, BANASHANKARI, TUMAKURU, KARNATAKA 572 102 …PETITIONER (BY SRI. JOSEPH VARGHESE , ADVOCATE) AND:
1.
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (VIGILANCE-04), KORAMANGALA, HAVING ITS OFFICE AT VTK-2, RAJENDRANAGARA, 8TH BLOCK, KORAMANGALA BENGALURU-560047 2.
JOINT COMMISSIONER OF COMMERCIAL TAXES, (ADMIN) DGSTO - 06, HAVING ITS OFFICE AT
Digitally signed by VANAMALA N Location:
HIGH COURT OF KARNATAKA
- 2 -
HC-KAR
CNR: KAHC010511022026 NC: 2026:KHC:46883 WP No. 23240 of 2026
3RD FLOOR, KIADB BUILDING, 2ND STAGE, PEENYA, BENGALURU-560 058.
…RESPONDENTS (BY SMT. MALAVIKA PRASAD, HCGP)
THIS WP IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER SECTION 74 (A) OF THE KGST ACT, 2017, DATED 19.06.2025 BEARING NO. JCCT(VIG)/ACCT(VIG)- 04/INS 2024-25 ISSUED BY THE RESPONDENT NO.1 (ANNEXURE-A) II) QUASHING THE IMPUGNED SUMMARY OF SHOW CAUSE NOTICE ISSUED FORM DRC-01 DATED 19.06.2025 BEARING NO.
ZD2906250618505 AND CASE ID- AD290325091820X ISSUED BY THE RESPONDENT NO.1 (ANNEXURE-A1) III) QUASHING THE IMPUGNED ORDER OF ADJUDICATION PASSED UNDER SECTION 74(A)(9) OF THE KGST ACT, 2017, DATED 06.03.2026, BEARING NO- DGSTO-06/AC(A)-6.8/ADJ/S.74/53/2025-26 AND CASE ID ASSIGN.AUDIT/937/2025-26 BY THE RESPONDENT NO.1 (ANNEXURE B) IV) QUASHING THE IMPUGNED SUMMARY OF ORDER ISSUED IN FORM GST DRC-07 DATED 06.03.2026 BEARING REFERENCE NO.
ZD290326028978Q ISSUED BY THE RESPONDENT NO.1 (ANNEXURE B1) V) ALTERNATIVELY, REMAND THE MATTER TO THE STAGE OF HEARING ON THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER
- 3 -
HC-KAR
CNR: KAHC010511022026 NC: 2026:KHC:46883 WP No. 23240 of 2026
SECTION 74 OF THE KGST ACT, 2017, DATED 19.06.2025 BEARING NO.
JCCT(VIG)/ACCT(VIG)- 04INS/2024-25 ISSUED BY THE RESPONDENT NO.1 (ANNEXURE A), KEEPING ALL CONTENTIONS OPEN AND THE REMAND PROCEEDINGS TO BE CONDUCTED IN ACCORDANCE WITH LAW.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B - GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner’s grievance is with the commencement of the proceedings under Section 74A of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services Tax Act, 2017 [KGST/CGST Act] and the proceedings for adjudication for the tax period April 2024 to March 2025 are commenced with the Notice in Form GST DRC-01 dated 19.06.2025 referring to Section 74[1] for the Financial Years [2021-22 to 2024-25] and it is
- 4 -
HC-KAR
CNR: KAHC010511022026 NC: 2026:KHC:46883 WP No. 23240 of 2026
seen that the adjudication is completed under section 74A of the KGST/CGST Act.
It cannot be in dispute that the proceedings had to be commenced with the Show Cause Notice under Section 74A, and Sri Joseph Varghese, the learned Counsel for the petitioner, and Ms. Malavika Prasad, a learned Government Pleader, are heard on whether there must be interference on this ground alone when the petitioner contends that there cannot be any cause for issuance of Show Cause Notice because it is entitled to the benefit of exemption under the Notification No.12/2017 if the value of supply of goods is below 25% of the total value of the supply of goods.
This Court must opine if the very initiation of the proceedings is without basis, the proceeding cannot be sustained. Further, the Officer who has passed the Adjudication Order is not a party to the
- 5 -
HC-KAR
CNR: KAHC010511022026 NC: 2026:KHC:46883 WP No. 23240 of 2026
proceedings but because the interference is on the ground that the Show Cause Notice itself is defective, the following.
ORDER Hence, the petition is allowed quashing the impugned Show Cause Notice/Summary dated 19.06.2025 [Annexures- A and A1] and the Adjudication Order/Summary dated 06.03.2026 [Annexures-B and B1] but without prejudice to the respondents to re-commence the proceedings subject to limitation.
Sd/- (B M SHYAM PRASAD) JUDGE
NV List No.: 2 Sl No.: 0