M/S Sri. Krishna Shelters Private LTD vs. The Deputy Commissioner Of Commercial Taxes

Sri Subramanya Bhat, the learned counsel for the petitioner, submits that the notices are addressed to an employee's email-ID and the petitioner could not have responded to such notices because the petitioner's operations have ceased in the year 2019-20. The learned counsel also submits that the audit observation relates to the work executed in the year 2016 -17 and therefore could not have been brought to tax under the GST regime especially with the exemption under the Notification in No.25/2012 issued under the VAT regime. HC-KAR NC: 2026:KHC:29722

Sri K. Hema Kumar, the learned Additional Government Advocate, submits that this Court’s intervention, even if there could be, must be in the light of the observation in the Adjudication Order, and the learned Additional Government Advocate invites this Court’s attention to the audit observation and submits that [a] based on bank transaction statement, it is verified that the work contract services were completed in the financial year 2019-20 and that the petitioner has not declared the transaction and discharged the tax, [b] the petitioner, who has not responded to the Show Cause Notices, cannot contend that the works contract service was completed in the year 2016-17 and [c] any assertion in this regard can only be accepted if documents are furnished.

This Court examines whether there must be interference with the Adjudication Order to extend an opportunity to the petitioner to file documents to HC-KAR NC: 2026:KHC:29722 show that it had completed all its work contract services in the year 2016-17 and therefore not exigible under the Act and if the petitioner is to be extended such opportunity, the terms upon which such opportunity must be extended.

It is seen from the Show Cause Notice issued in Form GST DRC -01 dated 24.09.2024 that, the petitioner's representative has appeared and stated orally that the petitioner is on the verge of insolvency/bankruptcy and that all the employees including him are no longer in employment and therefore no response is filed to audit observations on intimation thereof. If this statement is made on 24.09.2024, nothing is seen from the impugned order about further efforts taken to ensure that notice is served upon the petitioner. The service of Show Cause Notice on the petitioner's former employee would not in itself be sufficient. This Court also HC-KAR NC: 2026:KHC:29722 observes that the petitioner's case is that there was a fire in its premises.

These circumstances and the fact that the Adjudication, based on the bank transactions statement, is concluded on the ground that the works contract services are completed during the tax period 2019-20 persuades this Court to opine that the petitioner must be extended another opportunity to file documents to substantiate its underlying case that it had completed all the works contract services in the year 2016-17 and that the services are exempt from taxes in terms of the Notification No.25/2012. 7. The petitioner has approached this Court after the issuance of warrant for levy of fine by attachment and sale issued by the juri ictional Magistrate. The petitioner must be put on terms lest the proceedings are protracted, and the reasonable terms would be to stipulate that the petitioner must appear before the first respondent on 24.07.2026 HC-KAR NC: 2026:KHC:29722 and file all its documents to support its case and that if the petitioner fails to avail this opportunity, the authority must proceed in accordance with law. Hence, the following: ORDER