M/S Paxal Corporation vs. Union Of INDIA - Karnataka High Court, 17 December 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:53853 WP No. 32605 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 32605 OF 2024 (T-RES) BETWEEN: 1. M/S PAXAL CORPORATION (A PARTNERSHIP FIRM), HAVING ITS OFFICE AT NO. 13, SKR ROAD FORT, NO. 301, 3RD FLOOR, PAXAL TOWER, BENGALURU - 560 002, REPRESENTED BY ITS PARTNER, MR. B. CHAMPALAL BHANDARI …PETITIONER (BY SRI. BHARATH KUMAR V., ADVOCATE) AND: 1. UNION OF INDIA THROUGH ITS PRL. SECRETARY, MINISTRY OF FINANCE, NORTH BLOCK, CABINET SECRETARIAT, RAISINA HILLS NEW DELHI - 110 001. 2. STATE OF KARNATAKA, REPRESENTED BY ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO-110, DGSTO-3 HAVING OFFICE AT 1ST FLOOR, BMTC - TTMC BUILDING, JAYANAGAR 4TH BLOCK, Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:53853 WP No. 32605 of 2024 BENGALURU 560 011 - 3. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 3.7, 2ND FLOOR, BMTC BUS STAND, K.H. ROAD, SHANTHINAGAR, BENGALURU - 560 027 4. SUPERINTENDENT OF CENTRAL TAX RANGE ASD2, SOUTH DIVISION - 2 HAVING OFFICE AT C/O ASSISTANT COMMISSIONER OF CENTRAL TAX SOUTH DIVISION - 2 BENGALURU SOUTH COMMISSIONERATE 2ND FLOOR, BMTC BUILDING KANAKAPURA ROAD BENGALURU - 560 070 …RESPONDENTS (BY SMT. M.R. SINCHANA, CGC FOR R1; SRI. K. HEMA KUMAR, AGA FOR R2 AND R3; SRI. ARAVIND V. CHAVAN, ADVOCATE FOR R4) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO a) QUASH THE ORDER DATED 31.08.2023 IN NO.ADJU-117/DRC-07/24-25 PASSED BY THE RESPONDENT NO.3 HEREIN UNDER SECTION 73(9) OF THE KARNATAKA GOODS AND SERVICES ACT / CENTRAL GOODS AND SERVICES ACT, 2017 (ANNEXURE-A) AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:53853 WP No. 32605 of 2024 CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, the petitioner seeks the following reliefs: "a. Issue a writ, order or direction in the nature of certiorari or any other appropriate writ, order or direction quashing the order dated 31.08.2023 in No. ADJU-117/DRC-07/24-25 passed by the Respondent No. 3 herein under Section 73(9) of the Karnataka Goods and Services Act / Central Goods and Services Act, 2017 (Annexure A). b. Issue a writ, order or direction in the nature of certiorari or any other appropriate writ, order or direction quashing the order dated 27.02.2023 bearing No. ACCT/LGSTO- 110/TRAN-2/09/2022-23 passed by the Respondent No. 2 under Section 140 of the KGST / CGST Act R/w Rule 117 of the KGST /CGST Rules (Annexure B). c. Issue a writ, order or direction in the nature of mandamus or any other appropriate writ, order or direction directing the Respondent No. 2 herein to re-consider the rectified TRAN-1 application dated 08.11.2022 filed by the Petitioner with the office of Respondent No. 2 herein. d. Grant such other relief that this Hon'ble Court may deem fit in the facts of the present matter. HC-KAR NC: 2025:KHC:53853 e. Issue a writ in the nature of writ, order of direction in the nature of certiorari or any appropriate writ, quashing the report and communication dated 24.02.2023 formulated and preferred by the Respondent No. 4 (Annexure M1);"

Heard the learned counsel for the petitioner, learned CGC for respondent No.1, learned counsel for respondent Nos.2 and 3, learned counsel for respondent No.4 and perused the material on record.

A perusal of the material on record will indicate that pursuant to the application dated 08.11.2022 submitted by the petitioner, respondent No.4 - Central GST authorities conducted verification, during the course of which, they issued reminders to the petitioner calling upon him to produce documents and since the petitioner did not produce the said documents, respondent No.4 proceeded to issue a verification report against the petitioner, which was accepted by respondent No.2, who passed the impugned order at Annexure - B dated 27.02.2023, followed by the impugned order at Annexure - A dated 31.08.2024 passed by respondent No.3, aggrieved by which, the petitioner is before this Court by way of the present petition. HC-KAR NC: 2025:KHC:53853

It is submitted that if the impugned report and communication at Annexure - M1 dated 24.02.2023 formulated by respondent No.4 and the consequential orders passed by respondent Nos.2 and 3 are set aside and the matter remitted back to respondent No.4 for reconsideration afresh in accordance with law, the petitioner would appear before respondent No.4 and produce pleadings and documents before him, pursuant to which, respondent No.4 may be directed to submit a fresh verification report and respondent Nos.2 and 3 may be directed to proceed further in accordance with law.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

A perusal of the impugned verification report at Annexure - M1 dated 24.02.2023 will indicate that respondent No.4 has come to the conclusion that the petitioner had not submitted relevant documents in support of his claim. Under these circumstances, I deem it just and appropriate to adopt a justice oriented approach and in the light of the specific assertion on the HC-KAR NC: 2025:KHC:53853 part of the petitioner that, if one more opportunity is provided, the petitioner would appear before respondent No.4 and produce appropriate pleadings and documents, the impugned report at Annexure - M1 dated 24.02.2023 and subsequent impugned orders at Annexures - A and B dated 31.08.2024 and 27.02.2023 deserve to be set aside and the matter remitted back to respondent No.4 for reconsideration afresh in accordance with law.

In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned order at Annexure - A dated 31.08.2024 passed by respondent No.3, the impugned order at Annexure - B dated 27.02.2023 passed by respondent No.2 and the report and communication dated 24.02.2023 at Annexure - M1 preferred by respondent No.4, are hereby set aside. (iii) The matter is remitted back to respondent No.4 for reconsideration afresh in accordance with law. HC-KAR NC: 2025:KHC:53853 (iv) The petitioner shall appear before respondent No.4 on 19.01.2026 without awaiting further notice. (v) Liberty is reserved in favour of the petitioner to file additional pleadings, documents etc., which shall be considered by respondent No.4 and who shall provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law and formulate / prepare fresh verification report in accordance with law. (vi) After preparation and formulation of a fresh verification report, respondent No.4 shall forward the same to respondent Nos. 2 and 3, who shall proceed further and provide sufficient and reasonable opportunity to the petitioner and granting personal hearing and proceed further in accordance with law. (S.R.KRISHNA KUMAR) JUDGE SJK List No.: 2 Sl No.: 4