M/S. Sri Venkateshwara Plastic Industries vs. The Assistant Commissioner Of Commercial Tax
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Cause title — parties, addresses and appearances
ORAL ORDER The petitioner has called in question the Adjudication Order dated 21.11.2025 under Section 73(9) of the Central Goods and Services Tax Act, 2017 [for short, ‘the 'CGST Act'] read with Section 20 of the Integrated Goods and Service Tax Act, 2017. The Adjudication Order is produced as Annexure - A1. The petitioner, apart from challenging the said Adjudication Order, has also called in question the Show Cause Notice and the Summary. HC-KAR NC: 2026:KHC:31454
Mr. Y. Pranay Sharma, the learned counsel for the petitioner, submits that this Court must interfere with the very initiation of the proceedings quashing the entire proceedings because the proceedings are based on audit proceedings which are begun belatedly despite specific timelines under Section 65(3) of the KGST Act and that the first respondent could not have completed the adjudication proceedings because the first respondent was also the Audit Officer. On the petitioner's participation in the proceedings, Mr. Y. Pranay Sharma submits as follows.
[a] The petitioner's Auditor has appeared when extended with an opportunity of personal hearing, but he has not filed necessary documents to demonstrate that the petitioner had erroneously entered surplus sums under the Reverse Charge HC-KAR NC: 2026:KHC:31454 Mechanism and that this was a genuine human error, and [b] The petitioner would not be liable to answer a claim on the trade payables.
However, the learned counsel is categorical in stating that the petitioner will have to pay a fee for the delay in filing the Returns as observed in the impugned Adjudication Order. Mr. K. Hema Kumar, the learned Additional Government Advocate, is heard in the light of these circumstances, and the learned Additional Government Advocate points out that the petitioner has invoked this Court's juri iction without availing the appellate remedy and that the Appellate Authority could have considered all circumstances if the petitioner had availed this remedy.
The petitioner proposes to urge that the proceedings are vitiated on the grounds of limitation HC-KAR NC: 2026:KHC:31454 and on merit otherwise, but crucially the petitioner contends that the reason for the difference in the Input Tax Credit claimed under Reverse Charge Mechanism is because of a human error in entering the details and that it can demonstrate that it has discharged payments towards trade payables within one to two days but could not produce the documents. These circumstances must be reconsidered with due opportunity. Therefore, this Court opines that there must be interference to restore the proceedings to the stage of personal hearing with an opportunity to file an additional reply and produce documents leaving open all questions with the petitioner being put on terms. In the light of the afore, the following. ORDER
[a] The petition is allowed in part.
[b] The Adjudication Order dated 21.11.2025 [Annexure - A1] is quashed. HC-KAR NC: 2026:KHC:31454 [c] The petitioner shall appear before the first respondent without further notice on 27.07.2026 and shall be at liberty to file a further reply and produce documents.
[d] The petitioner shall also deposit 10% of the amount in demand by 27.07.2026 subject to the outcome. Failure of which shall be a default to the petitioner’s prejudice. (B M SHYAM PRASAD) JUDGE
RB List No.: 2 Sl No.: 12
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.