Nagabhushanamma vs. The Assistant Commissioner Of Commercial Taxes - Karnataka High Court, 21 July 2026

Cause title — parties, addresses and appearances

- 1 - HC-KAR CNR: KAHC010472442026 NC: 2026:KHC:37602 WP No. 21676 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 21676 OF 2026 (T-RES) BETWEEN: NAGABHUSHANAMMA PROPRIETOR OF SNS MODULAR FURNITURE D/O LAKSHAIAH AGED ABOUT 42 YEARS 92/2, BEGUR ROAD, HONGASANDRA, BENGALURU-560068 …PETITIONER (BY SRI. SANKARI V KRISHNAN.,ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO-016, DGSTO-4, BMTC BUILDING, 6TH FLOOR, KORAMANGALA BENGALURU-560095 2. STATE OF KARNATAKA, REPRESENTED BY SECRETARY FINANCE DEPARTMENT, VIDHANA SOUDHA, BANGALORE - 560001 3. CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY ITS CHAIRPERSON NORTH BLOCK, Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010472442026 NC: 2026:KHC:37602 WP No. 21676 of 2026 NEW DELHI-110 001 4. UNION OF INDIA MINISTRY OF FINANCE, REPRESENTED BY ITS SECRETARY NORTH BLOCK, NEW DELHI-110 001 …RESPONDENTS (BY SMT. JYOTI M. MARADI, AGA) THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER OF ADJUDICATION PASSED BY THE RESPONDENT NO.1 DATED 22.07.2024 PASSED UNDE SECTION 73(9) FOR THE TAX PERIOD 2020-21. COPY OF THE ORDER DATED 22.07.2024 PASSED UNDER SECTION 73(9) OF THE CGST ACT IS ENCLOSED AND MARKED AS ANNEXURE-A1. B) QUASHING THE SUMMARY OF ORDER IN FORM DRC-07 DATED 23.07.2024 ISSUED BY THE RESPONDENT NO. 1 BEARING REF. NO. ZD2907240746405. COPY OF THE SUMMARY OF ORDER IN FORM DRC-07 DATED 23.07.2024 IS ENCLOSED AND MARKED AS ANNEXURE- A2. C) QUASHING THE SHOW CAUSE NOTICE DATED 18.05.2024 ISSUED BY THE RESPONDENT NO. 1 BEARING REF. NO. ACCT/LGSTO-16/2A VS 38/2019- 20. COPY OF THE SHOW CAUSE NOTICE DATED 18.05.2024 IS ENCLOSED AND MARKED AS ANNEXURE- B1. D) QUASHING THE SUMMARY OF - 3 - HC-KAR CNR: KAHC010472442026 NC: 2026:KHC:37602 WP No. 21676 of 2026 SHOW CAUSE NOTICE IN FORM DRC-01 DATED 19.05.2024 ISSUED BY THE RESPONDENT NO. 1 BEARING REF. NO. ZD290524056588T. COPY OF THE SUMMARY OF SHOW CAUSE NOTICE IN FORM DRC-01 DATED 19.05.2024 IS ENCLOSED AND MARKED AS ANNEXURE-B2. E) QUASHING THE INTIMATION IN FORM DRC-01A DATED 07.05.2024 ISSUED BY THE RESPONDENT NO. 1 BEARING REF. NO. ACCT/LGSTO- 016/2A VS 3B/2023-24. COPY OF THE SUMMARY OF INTIMATION IN FORM DRC-01A DATED 07.05.2024 IS ENCLOSED AND MARKED AS ANNEXURE- C1. F) QUASHING THE INTIMATION IN FORM DRC-01A PART-A DATED 09.05.2024 ISSUED BY THE RESPONDENT NO. 1 TO BEARING REF. NO. ZD290524024829Z. COPY OF THE SUMMARY OF INTIMATION IN FORM DRC-01A PART-ADM 09.05.2024 IS ENCLOSED AND MARKED AS ANNEXURE- C2. G) DECLARE THAT THE IMPUGNED NOTIFICATION NO.9/2023-CT DATED 31.03.2023 IS ILLEGAL AND ULTRA VIRES THE PROVISIONS SECTION 168A OF CENTRAL GOODS AND SERVICE ACT, 2017 AND QUASH THE IMPUGNED NOTIFICATION NO 9/2023-CT DATED 31.03.2023 REFERRED AS ANNEXURE-D1. H) DECLARE THAT THE IMPUGNED NOTIFICATION NO.6/2023 DATER 06.04.2023 IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 168A OF KARNATAKA GOODS AND SERVICE ACT, 2017 AND ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT OR ORDER OR DIRECTION - 4 - HC-KAR CNR: KAHC010472442026 NC: 2026:KHC:37602 WP No. 21676 of 2026 AND QUASH THE IMPUGNED NOTIFICATION NO. 6/2023 DATED 06.04.2023 REFERRED AS ANNEXURE- D2. (I) ISSUE A WRIT OF MANDAMUS OR A WRIT IN THE NATURE OF MANDAMUS DIRECTING THE RESPONDENT NO. 1 TO UNFREEZE THE BANK ACCOUNT BEARING ACCOUNT NO. 1524020000000730 OF THE PETITIONER HELD IN INDIAN OVERSEAS BANK. J) WITHOUT PREJUDICE, AND IN THE EVENT THE OTHER RELIEFS ARE HEN NOT GRANTED, REMAND THE MATTER BACK TO THE FILE OF THE RESPONDENT NO. 1 FOR FRESH ADJUDICATION ON MERITS. THIS PETITION, COMING ON FOR ORDERS, 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 Adjudication Order dated 22.07.2024 [Annexure-A1] under Section 73 (9) of the Central Goods and Services Tax Act, 2017 [for short, the Act’]. This Adjudication Order is for the period between April 2019 to March 2020. The Adjudicating Officer has concluded the proceedings calling upon the petitioner HC-KAR

CNR: KAHC010472442026 NC: 2026:KHC:37602 to discharge liability in a sum of Rs.9,97,742/- observing thus: “In view of the non-submission of any objection, it was presumed that the taxable person has indirectly admitted the tax liability by not objecting to the afore mentioned discrepancy Notice in ASMT-10. Based on these facts, the undersigned with having the reason to believe that there is excess claim of input credit in GSTR 3B as compare with the Inward supplies auto populated in GSTR 2A which necessitate invoking of Section 73 of the CGST Act in terms of the CCTs Order under reference. The undersigned has proceeded with adjudication process under Sec.73 of the acts by obtaining an Assignment No.92/2024-25 dated 02/05/2024 issued by the JCCT (A), DGSTO -4, Bengaluru – 47 under Section 73 of the KGST Act, 2017.”

The petitioner has stated thus to show cause against non-participation in the adjudication proceedings. “The impugned Order of Adjudication was dated 22.07.2024 and uploaded on the GST portal. However, the Petitioner submits that it did not receive the aforementioned Notices or the Order until May 2026. The petitioner’s authorized HC-KAR

CNR: KAHC010472442026 NC: 2026:KHC:37602 person who was responsible for checking the GST portal and filing the regular forms and returns had not seen the Notices and Order uploaded on the portal, and the Petitioner, a small business owner who relied entirely on the accountant to check the portal, remained unaware of the proceedings concluded by the impugned Order. Moreover, the email ID to which the said notices, intimations and communications were sent did not belong to the Petitioner but belonged to the accountant. There was no communication by post or other such intimation to the petitioner, and thus the Order was in effect communicated to the Petitioner only when they specifically checked the Notices and orders section in May 2026. The time period of 3 months plus one month as computed from the date of the Order having elapsed by then, the Petitioner was left with no other recourse than to approach this Hon’ble Court by way of this petition.”

Ms. Shankari V. Krishnan, the learned counsel for the petitioner, and Ms. Jyoti M. Maradi, the High Court Government Pleader for the respondents, are heard for final disposal of the petition examining whether the petitioner must be extended another HC-KAR

CNR: KAHC010472442026 NC: 2026:KHC:37602 opportunity. The adjudication proceedings, which are commenced based on an audit note, is concluded with the presumption that the petitioner has indirectly admitted the liability and therefore has not filed statement of objections. The petitioner's case is that if another opportunity is extended, the petitioner can justify the returns filed in Form GSTR 3B. The Circular issued relevant to the subject tax period permits a Registered Tax Person [RTP] to produce certain documents when there is a mismatch between the auto-populated Returns and the Returns filed by the RTP. In the light of the afore, the following: ORDER The petition is allowed quashing the impugned Order dated 22.07.2024 [Annexure-A1], the Summary of the Order in Form DRC-07 dated 23.07.2024 HC-KAR

CNR: KAHC010472442026 NC: 2026:KHC:37602 [Annexure-A2], subject to the following terms. [a] The proceedings are restored to the first respondent for due consideration subject to deposit of 10% of the demand. [b] The petitioner is permitted to file, along with the certified copy of this order, the documents relating to relevant transactions as regards the Show Cause Notice dated 18.05.2024 [Annexure-B1] and the Summary of Show Cause Notice in DRC-01 dated 19.05.2024 [Annexure-B2]. [c] The petitioner shall produce these documents by 24.08.2026 and the fourth respondent shall consider these documents and HC-KAR

CNR: KAHC010472442026 NC: 2026:KHC:37602 then conclude the proceedings by a reasoned order. The petitioner shall also ensure that 10% of the demand as now permitted is deposited by this date. [d] All the contentions put forward on behalf of the petitioner are left open. (B M SHYAM PRASAD) JUDGE SA Ct:sr