Shifa Scrap Traders vs. Assistant Commissioner Of Commercial Taxes
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Cause title — parties, addresses and appearances
OF THE CONSTITUTION OF INDIA PRAYING TO ORDER UNDER SECTION 73(9) OF THE KARNATAKA GOODS AND SERVICES TAX ACT, 2017 AND CONCURRENT PROVISIONS OF THE CGST ACT, 2017 DATED 16/8/2024 BEARING NO.ACCT/LGSTO-170/ADJ-01/ 2024-25 PASSED BY ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LOCAL GOODS-FIRST RESPONDENT AND SERVICE TAX OFFICE-170, BANGALORE FOR PERIOD APRIL-2019 TO MARCH- 2020-ANNEXURE-A; (B) ORDER UNDER SECTION 74 BEARING REF NO.DCCT(A)-6.9/DGSTO-6/DRC- 07/2025-26 DATED 25/3/2026 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)- 6.9, DIVISIONAL GOODS AND SERVICE TAX OFFICE-6, BANGALORE FOR PERIOD APRIL 2019 TO MARCH 2020-SECOND RESPONDNET(ANNEXURE-B); (C) ORDER PASSED UNDER SECTION 74 OF THE ACT DATED 25/3/2026 BEARING REF NO.ZD2903261384662 BY THE DEPUTY COMMISSIONER OF, DGSTO-6, BANGALORE, KARNATAKA-SECOND RESPONDNET (ANNEXURE-C); (D) FORM GST DRC-07 DATED 25/3/2026 BEARING REF NO.ZD2903261384662 BY THE DEPUTY COMMISSIONER OF, DGSTO-6 (SECOND RESPONDENT) BANGALORE, KARNATAKA- ANNEXURE-D.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD HC-KAR
CNR: KAHC010499432026 NC: 2026:KHC:39141 ORAL ORDER
The petitioner's grievance is with the Adjudication Orders under Section 73(9) and Section 74 of the Karnataka Goods and Services Tax Act/Central Goods and Services Tax Act 2017 [for short, ‘the Act’]. These Adjudication Orders are for the period between April 2019 to March 2020 and the details of these orders are as follows: Sl. No. Notices/ Orders Date Provisions of CGST/KGST Act, 2017 Annexures 1 Order 16.08.2024 73 (9) A 2 Order 25.03.2026 74 B 3 Order 25.03.2026 74 C
Mr. E.I. Sanmathi, the learned counsel for the petitioner, submits that [i] the adjudication under Section 73 (9) of the Act is because of a mismatch between Forms GSTR-2A and GSTR-3B and the proceedings are concluded because the petitioner has not responded to the Intimation/Show Cause Notice issued, [ii] if the adjudication is thus concluded on 16.08.2024 as per Annexure - A under Section 73 of the Act, for the same period proceedings are initiated HC-KAR
CNR: KAHC010499432026 NC: 2026:KHC:39141 for adjudication under Section 74 of the Act resulting in the Adjudication Orders dated 25.03.2006 and [iii] even these proceedings are because of the alleged mismatch between the Forms in GSTR-2A and GSTR- 3B. The learned counsel proposes to argue against initiation of these proceedings attempting to show cause against the non-participation of these proceedings.
Mr. Hema Kumar K., a learned Additional Government Advocate who is assisted by Ms. Malavika Prasad, a learned High Court Government Pleader, who accepts notice of the respondents, submits that if the proceedings under Section 73 of the Act are because of the mismatch between forms GSTR-2A and GSTR-3B, the proceedings under Section 74 of the Act are because of inspection of the petitioners' premises by the concerned on 09.05.2025 [subsequent to the Adjudication Order under Section 73 of the Act]. The learned Additional Government HC-KAR
CNR: KAHC010499432026 NC: 2026:KHC:39141 Advocate submits that the proceedings are because the petitioner has claimed and utilized ITC based on alleged supplies with a non-existing taxpayer and without any actual movement of goods.
Mr. Hema Kumar K is categorical in asserting that the cause for the proceedings under Section 74 is different and that the petitioner cannot take exception with the initiation of such proceedings based on the adjudication order under Section 73 of the KGST/ CGST Act. At this stage, Mr. E.I. Sanmathi submits that the petitioner can produce documents/reconciliation to justify not only the alleged mismatch between GSTR-2A and GSTR-3B but also produce documents to establish genuineness of the transactions in terms of which the returns are filed in GSTR-3B.
On a careful consideration, especially the proceedings for the tax period between April 2019 to HC-KAR
CNR: KAHC010499432026 NC: 2026:KHC:39141 March 2020, the proceedings are concluded ex-parte and the petitioner contends that alleged mismatch between GSTR-2A and GSTR-3B and it can also produce documents to establish genuineness of the transactions in terms of which the returns are filed in GSTR-3B, this Court is of the view that the petitioner must have an opportunity to respond to the respective Show Cause Notices and because it is permissible under the statute, the petitioner's response must be with the second respondent who has commenced the proceedings under Section 74 of the Act. In the light of the afore, the following: ORDER [A] The petition is allowed in-part and the following Adjudication Orders are set-aside restoring the proceedings to the second respondent for adjudication reserving liberty to the petitioner to file response to the respective Show Cause Notices and HC-KAR
CNR: KAHC010499432026 NC: 2026:KHC:39141 documents to show cause against alleged mismatch and establish the genuineness of the transactions.
Sl. No.
Notices/ Orders
Date Provisio ns of CGST/K GST Act, 2017
Anne xures 1 Order 16.08.2024 73 (9) A 2 Order 25.03.2026 74 B 3 Order 25.03.2026 74 C
[B] The petitioner shall without further notice appear with the second respondent on - 05.10.2026. (B M SHYAM PRASAD) JUDGE SA Ct:sr
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.