M/S Presidency Builders And Developers vs. The Deputy Commissioner Of Commercial Taxes
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs: “A. Issue a writ of certiorari or any other suitable writ quashing the of show cause notice bearing No. DCCT/ADT-3/MNG/GST-61/2023-24 and summary of show cause notice Form GST DRC 01 bearing reference no. ZD290723014611K both dated 15.07.2023 issued by Respondent No. 1 under section 73(1) of the Karnataka Goods and Service Tax Act/Central Goods and Service Tax Act, 2017 and enclosed as Annexures F1 and F2; B. Issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned Order-in- Original bearing ORDER No: DCCT(A)-3/61/2023-24 and the corresponding Summary of Order in Form GST DRC-07 bearing Reference No. ZD2912230706187 both dated 23.12.2023 issued by HC-KAR NC: 2025:KHC:46499 Respondent No. 1 under Section 73 of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services Tax Act, 2017 read with Sections 50 and 122 thereof, in so far as they pertain to the demand of GST, interest, and penalty for the sale of completed immovable property for the Financial Year 2017-18; copies enclosed as Annexures G1 and G2; C. Declare that the sale of completed immovable property after issuance of a completion certificate by the competent authority does not constitute a "supply" under Section 7 of the KGST/CGST Act, 2017, in view of Entry 5 of Schedule III thereto, and is therefore not liable to GST; D. Quash the recovery proceedings initiated before the Court of the JMFC IV Court, Mangaluru pursuant to the aforesaid impugned orders, as being without juri iction, contrary to law, and in violation of the principles of natural justice vide Annexure M1 and Annexure M2; E. Direct the Respondents to forthwith refrain from initiating or pursuing any coercive recovery proceedings pursuant to the impugned Order-in- Original and Summary of Order, in respect of the transactions forming subject matter of the present petition; HC-KAR NC: 2025:KHC:46499 F. Pass such other or further orders as this Hon'ble Court may deem fit in the interests of justice and equity.”
Heard learned counsel for both parties and perused the material on record.
In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner could not submit his reply to the show-cause notice dated 15.07.2023 issued by respondent No.1-Deputy Commissioner, Commercial Taxes (Audit)-3 and consequently, the impugned exparte order at Annexures-G1 and G2 dated 23.12.2023 may be set aside and the matter be remitted back for reconsideration afresh in accordance with law. It is also submitted that prior to the impugned show-cause notice at Annexures-F1 and F2 dated 15.07.2023 issued by respondent No.1 - Deputy Commissioner, Commercial Taxes (Audit)-3, the very same Officer, respondent No.1 issued an audit observation dated 20.03.2023, to which the petitioner submitted reply dated 28.03.2023 and as such, having issued audit observation dated 20.03.2023, to which the HC-KAR NC: 2025:KHC:46499 petitioner submitted reply dated 28.03.2023, which would not be permissible for the very same officer, respondent No.1, to issue the impugned show cause notice, which is without juri iction or authority of law and the same deserves to be quashed on this ground alone.
Per contra, learned AGA on instructions, submits that insofar as the exparte order passed against the petitioner is concerned, appropriate order may be passed by this Court in the present petition for the purpose of setting aside the same and remit the matter back for reconsideration afresh in accordance with law. It is further submitted that the contentions as regards very same officer, respondent No.1, who had issued audit observations and thereafter, issued show-cause notice and passed impugned order is concerned, if the impugned order is set aside and the matter is remitted back to the stage of the petitioner submitting reply to the show-cause notice is concerned, the proceedings would be conducted by any Officer other than respondent No.1-DCCT(Audit- 3), which will be authorised by the Joint Commissioner to pass appropriate orders instead of respondent No.1, I deem it just and appropriate to set aside the impugned order at Annexures-G and HC-KAR NC: 2025:KHC:46499 G1 and recovery proceedings at Annexures-M1 and M2 and the matter is remitted back for reconsideration afresh, in accordance with law.
In the result, I pass the following: ORDER (i) The petition is allowed. (ii) The impugned order at Annexures-G1 and G2, both dated 23.12.2023 issued by respondent No.1 and recovery proceedings at Annexures-M1 and M2 are hereby set aside. (iii) The Joint Commissioner for Commercial Taxes is directed to assign the matter to any person/any proper Officer other than respondent No.1, who has passed the impugned order. (iv) The matter is remitted back to the concerned respondent for reconsideration afresh from the stage of submitting reply to the show cause notice and summary of show cause notice at Annexures-G1 and F2, both dated 15.07.2023, in accordance with law. HC-KAR NC: 2025:KHC:46499 (v) Liberty is reserved in favour of the petitioner to raise all contentions including the contentions as regards audit report, which shall be considered by a proper officer, who shall proceed further, in accordance with law. (vi) The petitioner shall appear before the concerned officer on 08.12.2025 without awaiting further notice from the respondent, failing which the present order shall stand recalled automatically, without further reference to the Bench and without further orders. (vii) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents etc., which shall be considered by the respondent, who shall provide sufficient and reasonable opportunity to the petitioner, hear him and proceed further, in accordance with law. (S.R.KRISHNA KUMAR) JUDGE
BMC List No.: 2 Sl No.: 7
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.