M/S. Rishabh Constructions Private Limited vs. The Commissioner Of Commercial Taxes
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A construction company challenged GST adjudication orders under Section 73 and subsequent appeal orders under Section 107 for FY 2017-18, 2019-20, and 2020-21. The petitioner contended a lack of due opportunity due to its Karnataka branch closure and non-access to the GST portal, and highlighted two simultaneous adjudication proceedings for the same FY 2019-20.
Held
The Court quashed the impugned adjudication and appeal orders, restoring the proceedings to the show cause notice stage. It held that two assessment proceedings for the same tax period were impermissible and that the petitioner deserved an opportunity to present its case, especially given the undisputed closure of its local branch.
Key Issues
Whether multiple adjudication proceedings for the same financial year are permissible, and whether the petitioner was denied a reasonable opportunity to be heard due to its branch closure and non-access to the GST portal.
Sections Cited
Section 73, Section 107
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER BEARING NO. DCCT/(AUDIT)-4.9/GST/DRC- 7/T.NO. /2024-25 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, AUDIT 4.9, DGSTO-4, BENGALURU, ( 3RD RESPONDENT , FOR SHORT), HC-KAR NC: 2026:KHC:31457 FOR THE FINANCIAL YEAR (FY) 2019-20 UNDER SEC. 73 OF THE GST ACT, WHICH IS PRODUCED ALONGWITH SYSTEM GENERATED ORDER AND SUMMARY OF THE ORDER IN FORM DRC-07 BEARING REFERENCE NO. ZD2908240003598, ALL DATED 01-08-2024 AS PER ANNEXURES -B (1), (2) AND (3) HEREWITH (C) ADJUDICATION ORDER BEARING NO. DCCT/(A)-4.5/DGSTO- 4/ADJUDICATION/NO.75/2024-25 DTD. 23-08-2024 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, AUDIT 4.5, DGSTO- 4, BENGALURU, (4TH RESPONDENT, FOR SHORT), ALSO FOR THE FINANCIAL YEAR (FY) 2019-20 UNDER SEC. 73 OF THE GST ACT, WHICH IS PRODUCED ALONGWITH SYSTEM GENERATED ORDER AND SUMMARY OF THE ORDER IN FORM DRC-07 BEARING REFERENCE NO. ZD2908240873115, BOTH DATED 24-08-2024, AS PER ANNEXURES -C(1) (2) AND (3) AND CONSEQUENTIAL APPEAL ORDER NO. ZD290126149243F DTD. 28- 01-2026 IN GST.AP.NO. 679/2025-26 PASSED BY THE JOINT COMMISSIONER OF COMMERCIAL TAXES, APPEALS -4, BENGALURU, THE 5TH RESPONDENT, AS PER ANNEXURE - F.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: HC-KAR NC: 2026:KHC:31457 CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner has called in question the Adjudication Orders and the Summary thereof under Section 73 of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services Tax Act, 2017 [for short, 'the KGST/CGST Act'] and the associated Rules. The petitioner has also unsuccessfully called in question these impugned Adjudication Orders in appeals under Section 107 of the KGST/CGST Act, and as such, the petitioner has also impugned these Orders-in-Appeal. The details of the Adjudication Orders, Summary Orders and the Order-in-appeal for the tax periods 2017-18, 2019-20 and 2020-21 are as follows. Assessm ent Year Adjudication Order with Annexure Summary Order with Annexure Appeal No. and date 2017-18 21.12.2023 21.12.2023 GST AP. No. 660/2025-26 06.01.2026 [Annexure -E] OIO No. 10/2023-24 No. ZD2912230627 80E [Annexure-A1] [Annexure -A3] 2019-20 01.08.2024 01.08.2024 HC-KAR NC: 2026:KHC:31457 No. DCCT(Audit)- 4.9/GST/DRC- 7/T.No./2024- 25 No: ZD2908240003 598 [Annexure -B1] [Annexure -B3] 2019-20 23.08.2024 24.08.2024 GST -Appeal No. 679/2025-26 28.01.2026 [Annexure - F] No. DCCT/(A)- 4.5/DGSTO- 4(Adjudication) No.75 /2024- 25 No. ZD2908240873 115 [Annexure -C1] [Annexure -C3] 2020-21 10.02.2025 10.02.2025 ZD2901261492691 28.01.2026 [Annexure -G] No. DCCT(Audit)- 4.9/GST/DRC- 7/T.No./2024- 25 No. ZD2902250358 33B [Annexure – D1] [Annexure – D3]
The proceedings under Section 73 of the KGST/CGST Act are commenced based on audit observations. The petitioner is also served with notices and intimations of personal hearing, but the petitioner has not replied or responded. The adjudication proceedings have culminated with the confirmation of the terms of the respective Show Cause Notices. The petitioner's appeals are dismissed on the ground of delay. There are two adjudication orders for the financial period 2019-2020. HC-KAR NC: 2026:KHC:31457
Mr. P. E. Umesh, the learned counsel for the petitioner, submits that this Court must intervene on the ground of lack of due opportunity restoring the proceedings for due consideration. The learned counsel asserts the following. [a] The petitioner has executed Works Contracts for the Government and its agencies but has seen a decline in the business even prior to 2019-20. [b] The petitioner had to close its business entirely in the year 2024 in the State of Karnataka with no employees here. [c] As there was no employee in Karnataka, the Portal was not accessed, and as such, the petitioner had no information about the Show Cause Notices. [d] The Confirmation Orders are because of delay in filing the returns or because of certain other issues such as that the petitioner has declared deductions of turnovers from gross contract receipts wrongly. HC-KAR NC: 2026:KHC:31457 [e] The petitioner has filed declarations giving the net value of the Works Contract and the tax separately. [d] Insofar as the tax period 2019-20, the learned counsel submits that both the third and the fourth respondents have simultaneously instituted proceedings resulting in the impugned Orders.
Mr. K. Hema Kumar, the learned Additional Government Advocate for the respondents, is heard on whether this Court must interfere under Article 226 of the Constitution of India in the afore circumstances without relegating the petitioner to appeal under Section 112 of the KGST/CGST Act and the terms upon which there must be interference. The learned Additional Government Advocate submits that this Court, even if persuaded to interfere, must ensure that the petitioner, who has only deposited HC-KAR NC: 2026:KHC:31457 10% of the demand, deposits the next 10% of the tax in demand.
It is trite that there could not have been two assessment proceedings on the same issues [which is for the tax period 2019-20]. This affords the first reason for interference. This Court must next observe that the petitioner's contention that the decline in its business in Karnataka resulted in the closure of its branch office in Karnataka is also not disputed. If there has to be a remand on the first ground, the second ground also justifies a remand insofar as the financial years 2017-18 and 2020-21. 6. Further, upon remand, the concerned officers can examine all the issues based on the possible explanation that the petitioner will offer based on the documentary evidence. Therefore, the question of interference is answered accordingly. The petitioner has deposited 10% of the demand while HC-KAR NC: 2026:KHC:31457 filing the appeals, this Court is not persuaded to put the petitioner on additional term.
However, this Court must observe that insofar as the Adjudication Orders under Section 73 of the KGST/CGST Act for the financial year 2019- 20, it must be only by one officer, and when queried, it is stated that it could either be by the third or fourth respondent. It is further submitted that it would also be open to the petitioner to make a request with the Joint Commissioner of Commercial Taxes, Administration for assignment of proceedings relevant to the three financial periods to one officer for a comprehensive adjudication. In the light of the afore, the following: ORDER
[A] The petition is allowed in-part.
[B] The following impugned Adjudication Orders, Summary Orders and the HC-KAR NC: 2026:KHC:31457 Orders-in-Appeal as follows are quashed. Assessm ent Year Adjudication Order with Annexure Summary Order with Annexure Appeal No. and date 2017-18 21.12.2023 21.12.2023 GST AP. No. 660/2025-26 06.01.2026 [Annexure -E] OIO No. 10/2023-24 No. ZD2912230627 80E [Annexure-A1] [Annexure -A3] 2019-20 01.08.2024 01.08.2024
No. DCCT(Audit)- 4.9/GST/DRC- 7/T.No./2024- 25 No: ZD2908240003 598 [Annexure -B1] [Annexure -B3] 2019-20 23.08.2024 24.08.2024 GST -Appeal No. 679/2025-26 28.01.2026 [Annexure - F] No. DCCT/(A)- 4.5/DGSTO- 4(Adjudication) No.75 /2024- 25 No. ZD2908240873 115 [Annexure -C1] [Annexure -C3] 2020-21 10.02.2025 10.02.2025 ZD29012614926 91 28.01.2026 [Annexure -G] No. DCCT(Audit)- 4.9/GST/DRC- 7/T.No./2024- 25 No. ZD2902250358 33B [Annexure – D1] [Annexure – D3]
[C] The proceedings are restored to the stage of the respective Show Cause Notices for reconsideration with opportunity to the petitioner to file its HC-KAR NC: 2026:KHC:31457 response with documents and the petitioner shall appear before the corresponding respondents on 22.09.2026 without further notice.
[D] Insofar as the proceedings for the financial year 2019-20, the petitioner shall appear with the fourth respondent but with liberty to the petitioner to file a request with the Joint Commissioner of Commercial Taxes, Administration for assignment of all the cases to one officer for a comprehensive adjudication. (B M SHYAM PRASAD) JUDGE
RB
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.