M/S Machideva Gramodyoga Hagu Vidya Samsthe vs. The Assistant Commissioner Of Central Tax - Karnataka High Court, 28 July 2026

Cause title — parties, addresses and appearances

- 1 - HC-KAR CNR: KAHC010504052026 NC: 2026:KHC:39142 WP No. 23070 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 23070 OF 2026 (T-RES) BETWEEN: M/S MACHIDEVA GRAMODYOGA HAGU VIDYA SAMSTHE A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER SHRI. G D GOPAL, AGED ABOUT 71 YEARS SON OF SRI. DODDASHETTY HAVING OFFICE AT FACTORY NO.20, LAGGARE CHOWDESHWARI NAGAR, ADHILAKSHMI MEMORIAL HALL BEHIND TIRUMALA PALACE BENGALURU - 560 058. …PETITIONER (BY SRI. PRANAY SHARMA Y.,ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF CENTRAL TAX, SOUTH DIVISION-4 , BANGALORE SOUTH COMMISSIONERATE Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010504052026 NC: 2026:KHC:39142 WP No. 23070 of 2026 7TH FLOOR, KENDRIYA SADAN, KORAMANGALA BENGALURU - 560097. 2. OFFICE OF THE COMMISSIONER OF CENTRAL TAX SOUTH DIVISION-4, BANGALORE SOUTH COMMISSIONERATE 7th FLOOR, KENDIRYA SADAN KORAMANGALA BENGALURU 560097. 3. THE BRANCH MANAGER CORPORATION BANK 113, S C ROAD, NR ANANDA RAO CIRCLE BENGALURU 560009. 4. THE SENIOR DIVISIONAL FINANCE MANAGER SOUTH WESTERN RAILWAYS, BENGALURU DIVISION, BENGALURU 560 023. …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 DATED 03.04.2023 VIDE ORDER SI NO. 742/2022 4 PASSED BY RESPONDENT NO.1 1.E., THE ASSISTANT COMMISSIONER OF CENTRAL TAX BEARING DIN NO. HC-KAR

CNR: KAHC010504052026 NC: 2026:KHC:39142 2030457000000333A4P UNDER SECTION 73 OF THE FINANCE ACT 1994. COPY OF THE ORDER IN ORIGINAL DATED 03.04.2023 ORDER NO. VIDE ORDER NO. 742/2022 4 BEARING DIN NO. 2030457000000333A4P PASSED BY THE RESPONDENT NO.1 IS ENCLOSED AND MARKED AS ANNEXURE-A1; II) QUASHING NOTICE ISSUED IN FORM GST DRC-13 TO THE THIRD RESPONDENT I.E. THE PETITIONER'S BANKER DATED 11.06.2026 ISSUED BY THE RESPONDENT NO.1 TO THE PETITIONER. COPY OF THE NOTICE FILE NO. GEXCOM/TAR/D/ST/3426/2025CGST -DIR- 4/COMMRTE-959/26 ISSUED IN FORM GST DRC-13 DATED 11.06.2026 IS ENCLOSED AND MARKED AS ANNEXURE -A2; III) DIRECTION IN NATURE OF MANDAMUS TO THE R4 TO PROVIDE COPIES OF THE SERVICE TAX REMITTED IF NAY TO THE PETITIONER AND ALSO TO PROVIDE A LETTER OF CONFIRMATION OF AVAILING SERVICE TO THE R4. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD HC-KAR

CNR: KAHC010504052026 NC: 2026:KHC:39142 ORAL ORDER

The petitioner's grievance is with the Adjudication Order dated 03.04.2023 [Annexure-A1] under Section 73 of the Finance Act, 1994 [for short, the Act’]. As pointed out by Sri Pranay Sharma Y., the learned counsel for the petitioner, the first respondent has commenced the proceedings based on the inputs received from the Central Board Direct Taxes about the Returns filed for the assessment year 2016-17, and the first respondent has concluded the proceedings with the observations that read as under: “(i) I hold that the activity undertaken by the notice is a taxable service in terms of Section 65B(44) read with Section 65B(51) of the Finance Act, 1994. (ii) I hold that the amount of Rs. 41,46,494/- is the consideration received for the provision of taxable service so provided by them during the period April 2015 to March 2016, in terms of Section 67(1)(i) of the HC-KAR

CNR: KAHC010504052026 NC: 2026:KHC:39142 Finance Act, 1994 read with Service Tax (Determination of Value) Rules, 2006. Sri Aravind V Chavan, a learned standing counsel for the respondents, is heard in the light of these reasons and the petitioner's specific case that the petitioner can produce documents to justify the that the petitioner’s services are indeed exempted from exigibility while pleading bona fides for not producing the documents in the proceedings before the first respondent. The petitioner relies upon the decision of this Court in M/s. Karnataka Chinmaya in W.P. No.11154/2023 and connected matters dated 03.07.2024. On a careful consideration of all these circumstances, and to enable complete adjudication subject to further proceedings under the Statute if there is cause, this Court is of the view that there HC-KAR

CNR: KAHC010504052026 NC: 2026:KHC:39142 must be interference with the impugned order dated 03.04.2023 restoring the proceedings to the first respondent with liberty to the petitioner to demonstrate the nature of the services and its exigibilty. Hence, the following: ORDER [A] The petition is allowed in-part and the Adjudication Order dated 03.04.2023 [Annexure-A1] under Section 73 of the Finance Act, 1994 is quashed.

[B] The petitioner is reserved with liberty to file such response along with documents to the Show Cause Notice as per Annexure-A2 without further notice on 21.09.2026. (B M SHYAM PRASAD) JUDGE SA Ct:sr