M/S Trans INDIA International LTD vs. The Commissioner Of Central Tax
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner's grievance is with the very issuance of the Show Cause Notice dated 16.04.2021 [Annexure-B] under the Finance Act, 1994 [for short, ‘the Act’]. The petitioner has also called in question the culmination of the Show Cause Notice with the Order-in-Original dated 11.08.2022 [Annexure-C] and the Demand dated 31.01.2025 in Form GST DRC-13 [Annexure-E]. Sri B.G. Chidananda Urs, the learned counsel for the petitioner, submits that this Court must HC-KAR
CNR: KAHC010405692026 NC: 2026:KHC:36311 quash the very Show Cause Notice because it is based only upon the input from Central Board of Direct Taxes [CBDT] without reference to the juri ictional facts such as the service that is offered and the service tax that ought to have been paid. The learned counsel proposes to elaborate upon why this Court must accept his arguments and quash the Show Cause Notice.
However, when queried on the petitioner's response to the Show Cause Notice, the learned counsel submits that the petitioner, who is engaged in business as a Goods Transport Agency Services and Courier Services, is registered for the service taxes in the year 2005 and has been filing Nil returns because the petitioner's services would be chargeable to tax under the Reverse Charge Mechanism. HC-KAR
CNR: KAHC010405692026 NC: 2026:KHC:36311
Sri B.G. Chidananda Urs also argues that this Court must observe that the response filed by the petitioner must be considered by the fourth respondent in the light of the Circular issued which prescribes that the concerned, whenever there is input from sources such as CBDT, must investigate into the input received and issue Show Cause Notice only when there is reason for the same.
Sri Jeevan J. Neeralagi, a learned standing counsel for the respondents who accepts notice, is heard in the light of this canvass. The inarguable position is that this Court, in matters where proceedings are initiated and culminated based on inputs received from CBDT, has restored the proceedings for reconsideration with due opportunity to the noticee to respond. This Court is persuaded to allow the same recourse HC-KAR
CNR: KAHC010405692026 NC: 2026:KHC:36311 in the present proceedings because the proceedings must fail if ultimately the petitioner stands vindicated in its stand that the services offered is exigible under the Reverse Charge Mechanism and that no liability can be fixed merely upon extrapolation of data from the IT portal if indeed the petitioner’s services are covered under the Reverse Charge Mechanism. In the light of the afore, the following: ORDER [A] The petition is allowed in-part. The impugned Order-in-Original dated 11.08.2022 [Annexure-C] and the Demand in Form GST DRC-13 dated 31.01.2025 [Annexure-E] are quashed restoring the proceedings to the second respondent. [B] The petitioner shall appear before the second respondent on 22.09.2026 and the HC-KAR
CNR: KAHC010405692026 NC: 2026:KHC:36311 petitioner shall be at liberty to file response to the Show Cause Notice on this day. [C] This Court reiterates that if the petitioner files such response along with the documents and makes a request for a personal hearing, the second respondent shall extend such opportunity and conclude the proceedings by a reasoned order considering all grounds. [D] All questions are left open to be considered in such proceedings. (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.