Judgment
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
IN THE HIGH COURT OF KARNATAKAAT BENGALURU DATED THIS THE 29THDAY OF AUGUST, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 14145 OF 2026 (T-RES) C/W WRIT PETITION NO. 23152 OF 2026
W.P. NO. 14145 / 2026
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.
COMMERCIAL TAX OFFICER ENFORCEMENT SOUTH ZONE-31 HAVING ITS OFFICE AT B-BLOCK, ROOM NO. 605,
Digitally signed by VANAMALA N Location:
HIGH COURT OF KARNATAKA
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
6TH FLOOR, VTK BUILDING, RAJENDRANAGARA, KORAMANGALA BENGALURU-560047
2.
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (DGSTO-06) HAVING ITS OFFICE AT BEHIND SHANKAR MUTT, SRI RAGHAVENDRA BADAVANE, MADHUGIRI, TUMAKURU-572 132.
3.
JOINT COMMISSIONER OF COMMERCIAL TAXES, (ADMINISTRATION)-DGSTO-06.
HAVING ITS OFFICE AT 3RD FLOOR, KIADB BUILDING.
14TH CROSS, 2ND STAGE, PEENYA, BENGALURU-560 058
4.
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, VIGILANCE - 04, HAVING ITS OFFICE AT VTK BUILDING-2.
RAJENDRA NAGAR, 8TH BLOCK, KORAMANGALA, BANGALORE-560 047 6…RESPONDENTS (BY SRI. K HEMAKUMAR, AGA A/W;
SMT. MALAVIKA PRASAD, HCGP )
THIS W.P. IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TOQUASH THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER SECTION 73 OF THE KGST ACT, 2017, DATED 26.09.2025 BEARING NO.
ADCOM/ENF/SZ/CTO- 31/DRC-01/2024-25 ISSUED BY THE RESPONDENT NO.
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CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
1 (ANNEXURE-A).II) QUASHING THE IMPUGNED SUMMARY OF SHOW CAUSE NOTICE ISSUED FORM DRC-01 DATED 26.09.2025 BEARING NO.
ZD290925174264W AND CASE ID AD2909250559089 ISSUED BY THE RESPONDENT NO. 1 (ANNEXURE-A1)III) QUASHING THE IMPUGNED ADJUDICATION ORDER PASSED UNDER SECTION 73(9) OF THE BEARING KGST ACT, 2017 DATED 25.02.2026 BEARING NO.CTO (AUDIT)/M.GIRI./T.NO.811/25-26 BY THE RESPONDENT NO.2 (ANNEXURE-B)IV) QUASHING THE IMPUGNED SUMMARY OF ORDER ISSUED IN FORM GST DRC-07 DATED 25.02.2026 BEARING REFERENCE NO.
ZD290226132580I ISSUED BY THE RESPONDENT NO.2 (ANNEXURE-B1)V) QUASHING THE IMPUGNED GARNISHEE NOTICE ISSUED UNDER SECTION 79(1)(C) OF THE KGST ACT, 2017 BY THE RESPONDENT NO.2 DATED 17.03.2026 BEARING NO.
CTO(AUDIT)/MADHUGIRI/894/2025-26 TO THE BANKER OF THE PETITIONER, THE BRANCH MANAGER, AXIS BANK, TUMAKURU (ANNEXURE-D)VI) ALTERNATIVELY, REMAND THE MATTER TO THE STAGE OF HEARING ON THE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER SECTION 73 OF THE KGST ACT, 2017, DATED 26.09.2025 BEARING NO.
ADCOM/ENF/SZ/CTO-31/DRC-01/2024-25 ISSUED BY THE RESPONDENT NO. 1 (ANNEXURE-A), KEEPING ALL CONTENTIONS OPEN AND THE REMAND PROCEEDINGS TO BE CONDUCTED IN ACCORDANCE WITH LAW.
W.P. NO. 23152/ 2026
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,
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CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
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 3RDFLOOR , KIADB BUILDING, 2ND STAGE, PEENYA, BENGALURU - 560058 …..RESPONDENT (BY SRI. K. HEMAKUMAR, AGA A/W;
SMT. MALAVIKA PRASAD, HCGP) THIS WP IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHTHE IMPUGNED SHOW CAUSE NOTICE ISSUED UNDER SECTION 74 OF THE KGST ACT, 2017, DATED 19.06.2025 BEARING NO.
JCCT(VIG)/ACCT(VIG)-
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CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
04/2024-25 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(9) OF THE KGST ACT, 2017, DATED 06.03.2026, BEARING NO DGSTO-06/AC(A)- 6.8/ADJ/S.74/126/2025-26 AND CASE ID ASSIGN.AUDIT/936/2025-26 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. ZD290326028868T 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 SECTION 74 OF THE KGST ACT, 2017, DATED 19.06.2025 BEARING NO.
JCCT(VIG)/ACCT(VIG)- 04/2024-25 ISSUED BY THE RESPONDENT NO.1 (ANNEXURE A), KEEPING ALL CONTENTIONS OPEN AND THE REMAND PROCEEDINGS TO BE CONDUCTED IN ACCORDANCE WITH LAW IN A TIME-BOUND MANNER IN SUCH PERIOD AS THIS HON'BLE COURT MAY DEEM FITAND; VI. PASS SUCH OTHER ORDERS AS THIS HON'BLE COURT MAY DEEM FIT IN THE CIRCUMSTANCES ABOVE AS MAY BE JUST AND NECESSARY.
THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
ORAL ORDER
The petitioner has called in question the Show Cause Notice, the Adjudication Order and Garnishee Notice, the details of which are as follows:
IN W.P.NO.14145/2026:
Sl.
No.
Notices/ Orders
Date Provisions of the KGST/CGST Act, 2017
Annexures 1 Show Cause Notice 26.09.2025 73 A 2 Summary of Show Cause Notice 26.09.2025 - A1 3 Adjudication Order 25.02.2026 73(9) B 4 Summary of the Order 25.02.2026 - B1 5 Garnishee Notice 17.03.2026 79(1)(c) D
IN W.P.NO.23152/2026:
Sl.
No.
Notices/ Orders
Date Provisions of the KGST/CGST Act, 2017
Annexures 1 Show Cause Notice 19.06.2025 74 A 2 Summary of the Show Cause Notice 19.06.2025 - A1 3 Adjudication Order 06.03.2026 74 (9) B 4 Summary of the Order 06.03.2026 - B1
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
2.
The impugned show cause notices relate to financial period viz., 2021-22 to 2024-25 [in W.P.
No.23152/2026] and for 2023-24 [in W.P.
No.14145/2026] and the Adjudication Orders relate to the same financial period viz., 2023-24 and these proceedings are by the two different officers. If the first Show Cause Notice is dated 19.06.2025 and the subsequent Adjudication Order is by the Assistant Commissioner of Commercial Taxes [Audit] – 6.8, (DGSTO-6) and the proceedings are commenced because of mismatch in the declaration in Form GSTR-3B and Form GSTR-7 [in W.P.
No.23152/2026], the next Show Cause Notice is dated 26.09.2025 issued by the Commercial Tax Officer, Enforcement – 31, Bengaluru and the proceedings are commenced because of the erroneous declaration of the turnover as ‘Nil’/Exempted Turnover’ [in W.P. No.14145/2026].
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
3. The petitioner’s case is that there cannot be such allegation because it is entitled to exemption under the Notification No.12/2017 because the value of the goods supplied as part of the work contract is lesser than 25% of the value of the work contract but the petitioner has not participated in either of the proceedings. The proceedings are culminated with the adjudication orders because the petitioner has not responded despite reminders.
4. Mr. Joseph Varghese, the learned counsel for the petitioner, and Mr. K.Hema Kumar, a learned Additional Government Advocate who is assisted by Ms.Malavika Prasad, a learned High Court Government Pleader, are heard on whether there could be two simultaneous proceedings commenced within a period of three months and that too under Sections 74 and 73 of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services
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CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
Tax Act, 2017 [for short, ‘the KGST/CGST Act’] and if one of the two proceedings cannot be sustained, the terms upon which the writ petitions must be disposed of.
5. It is not in dispute that the Assistant Commissioner of Commercial Taxes (DGSTO-06) has passed the Adjudication Order under Section 73 of the KGST/CGST Act on 25.02.2026 subsequent to the issuance of Show Cause Notice dated 26.09.2025 prior to the Adjudication Order dated 06.03.2026 under Section 74 of the KGST/CGST Act. This Court finds that culmination of the proceedings under Section 74 after adjudication order under Section 73 is incongruous for obvious reasons and the proceedings under Section 74 of the KGST/CGST Act, including the show cause notice dated 19.06.2025, should be quashed.
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
6. The next question is should this Court restore the proceedings to the stage of show cause notice under Section 73 of the KGST/CGST Act for reconsideration interfering with the adjudication order dated 25.02.2026. These proceedings are concluded exparte and the petitioner’s case is that it can produce documents to justify to its claim for exemption under the Notification No.12/2017 and in the petitioner’s own case for other tax period in what could be called a similar set of circumstances, this Court has intervened to restore the proceedings for reconsideration observing that a complete adjudication would be when the documents are reexamined to decide on whether indeed there could be allegation of mismatch or erroneous declaration on terms. Hence, the following:
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
ORDER
A. The writ petition in W.P.No.23152/2026 is allowed quashing the following Orders/Notices:
Sl.
No.
Notices/ Orders
Date Provisions of the KGST/CGST Act, 2017
Annexures 1 Show Cause Notice 19.06.2025 74 A 2 Summary of the Show Cause Notice 19.06.2025 - A1 3 Adjudication Order 06.03.2026 74 (9) B 4 Summary of the Order 06.03.2026 - B1
B. The writ petition in W.P.No.14145/2026 is allowed-in-part quashing the following restoring the proceedings for reconsideration.
Sl.
No.
Notices/ Orders
Date Provisions of the KGST/CGST Act, 2017
Annexures 1 Adjudication Order 25.02.2026 73(9) B 2 Summary of the Order 25.02.2026 - B1 3 Garnishee Notice 17.03.2026 79(1)(c) D
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HC-KAR
CNR: KAHC010313912026 NC: 2026:KHC:46880 WP No. 14145 of 2026 C/W WP No. 23152 of 2026
C.
The petitioner shall file a certified copy of this Order with the Commercial Tax Officer and appear before him without further notice on 30.09.2026.
D.
The petitioner shall also file reply and documents on the same day and the Authorities shall pass just orders after considering the response by the petitioner.
Sd/- (B M SHYAM PRASAD) JUDGE
SA Ct:sr