M/S. Yokogawa INDIA Limited vs. The Assistant Commissioner Of Central Tax - Karnataka High Court, 31 July 2026

Cause title — parties, addresses and appearances

- 1 - HC-KAR CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 20201 OF 2026 (T-RES) BETWEEN: M/S. YOKOGAWA INDIA LIMITED, NO. 96, ELECTRONIC CITY COMPLEX, HOSUR ROAD, ELECTRONIC CITY, BANGALORE - 560 100 (REPRESENTED BY NARAYANA HEGDE, DEPUTY GENERAL MAGAGER-INDIRECT TAX INCORPORATED UNDER THE COMPANIES ACT, 1956. …PETITIONER (BY SRI. RAVI RAGHAVAN., ADVOCATE A/W MS. AYUSHREE JHAWAR., ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF CENTRAL TAX THE ASSISTANT COMMISSIONER OF CENTRAL (SOUTH DIVISION - 08), BENGALURU SOUTH COMMISSIONERATE, 7TH FLOOR, C - WING, KENDRIYA SADAN, KORAMANGALA, BENGALURU - 560 034. Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026 2. THE COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH COMMISSIONERATE, BENGALURU, 1ST FLOOR, C R BUILDING, QUEENS ROAD, SHIVAJI NAGAR, BENGALURU - 560 001. …RESPONDENTS (BY SRI.JEEVAN J NEERALGI., ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPORPIRATE WRIT OR ORDER OR DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA ORDERING TO QUASH THE IMPUGEND

ORDER 201/2025-26-GST- 8 DATED 30.03.2026 ISSUED TO THE PETITIONER BY RESPONDENT NO.1 ENCLOSED AT ANNEXURE-A CONFIRMING DEMAND OF ALLEGEDLY INELIGIBLE ITC OF RESPONDENT.1,79,77,061/- ALONG WITH APPLICABLE INTEREST AND EQUIVALENT PENALTY OF RESPONDENT.1,79,77,061/-.

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 HC-KAR

CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026

ORAL ORDER

The petitioner's grievance is with the Order-in- Original dated 30.03.2026 under Section 74 of the Central Goods and Services Tax Act, 2017 [for short, the Act’] confirming a demand on the ground of availment of ineligible ITC and the claim for interest and penalty. This Court, on 15.07.2026, has recorded that the grounds canvassed by Sri Ravi Raghavan, the learned counsel for the petitioner, in support of the petitioner's cause against the reasons assigned by the first respondent for confirmation. The relevant portion of this Court's order reads as under: “ [i] The order relates to the period between July 2017 and March 2019 and for this period, the petitioner was served with an order dated 31.01.2025 under Section 74 of the CGST Act. [ii] The petitioner has called this order in question before this Court in W.P.No.12828/2025. [iii] This Court has disposed of this petition on 26.04.2025 directing the second HC-KAR

CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026

respondent to treat the proceedings under Section 73 of the CGST Act and pass orders under Section 73(9) thereof observing that the petitioner will also be entitled to file an application to avail the benefit of Amnesty Scheme as contemplated under Section 128(A) of the CGST Act. [iv] Thereafter, an order is also passed on 16.05.2025 under Section 73 of the CGST Act and the petitioner is permitted waiver of interest and penalty under the Amnesty Scheme in terms of Form GST SPL-05. [v] Notwithstanding the afore, the petitioner is issued with Show Cause Notice for adjudication under Section 74 of the CGST Act and the petitioner has filed a detailed response bringing forth the outcome in the writ petition and the further proceedings. However, the impugned order is passed without considering any of these circumstances.

In this regard, the learned counsel invites this Court's attention to Paragraph No. 8.2 which reads as under. HC-KAR

CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026

"8.2 In the instant case, the earlier demand was raised under Section 74 of the CGST Act, 2017 for the period July 2017 to March 2019 and the taxpayer appears to have utilized the GST paid against the said demand raise which appears to be blocked credit under the section 175(i) as detailed above. Therefore, the taxpayer is not eligible for such Input tax Credit. Apart from the above, it is observed that, the ITC pertains to the period from July 2017 to March 2019 for the tax paid under RCM for Import of services which was availed in the month of October 2022, hence, such ITC is time barred in terms of section 16(4) of the CGST Act, 2017. Further it appears from the foregoing that ineligible/irregularly availed ITC was utilized for payment of GST is in contravention of the provisions of Section 175(i) read with Section 20 of IGST Act, 2017 involves element of fraud/willful misstatement/suppression of facts to evade tax." HC-KAR

CNR: KAHC010445882026 NC: 2026:KHC:40137 WP No. 20201 of 2026

Sri Ravi Raghavan, in continuation, submits that the ITC cannot be denied because the proceedings inarguably are concluded under Section 73 of the Act in the light of the circumstances as stated with the petitioner availing the benefit under the Scheme. Sri Jeevan J. Neeralgi, the learned counsel for the respondents, is unable to controvert these as each of these are borne out of the records. Therefore, this Court must intervene observing that the Adjudication Order is without considering the material circumstances. Hence, the following: ORDER The petition is allowed and the impugned Adjudication Order dated 30.03.2026 as per Annexure-A is quashed. (B M SHYAM PRASAD) JUDGE SA Ct:sr