M/S Sri Sai Motors vs. State Of Karnataka

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. HC-KAR NC: 2025:KHC:45469

Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of the Co-ordinate Bench of this Court in the case of M/s.Happymongo Online Solution Private Limited Vs. State of Karnataka and Anr., - W.P.No.26204/2025 dated 10.10.2025 wherein it was held as under: “In this petition, petitioner seeks for the following reliefs:-

Heard learned counsel for the petitioner and learned HCGP for the respondents and perused the material on record.

A perusal of material on record will indicate that pursuant to an Intimation at Annexure-H in Form DRC- 01A dated 18.04.2023, the 2nd respondent issued a show- cause notice dated 05.06.2023 under Section 73(1) of the CGST/KGST Act, 2017 alleging that there was short- declaration of output tax liability. The petitioner filed its reply to the aforesaid Show-cause notice on 23.12.2023 and also filed additional reply along with supporting documents on 04.04.2024 and sought for personal hearing. Subsequently, the 2nd respondent passed an adjudication order dated 17.04.2024 under Section 73(9) of the CGST / KGST Act confirming a total demand of Rs.22,26,612/- along with interest of Rs.22,04,346/- and a penalty of Rs.2,33,863/-, without granting an opportunity of personal hearing to the petitioner. Thereafter, the 2nd respondent initiated recovery proceedings against the petitioner in Crl.Misc.106/2025 before the Court of Special Judge, JMFC (Sales Tax), which issued a Notice dated 04.07.2025 calling upon the petitioner to appear before the aforesaid court and to pay the arrears of tax. The petitioner only on HC-KAR NC: 2025:KHC:45469 receiving the aforesaid Notice on 12.08.2025, realized regarding the said ex-parte impugned adjudication order. Aggrieved by which, the petitioner is before this Court by way of the present petition.

In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that though the petitioner had sought for personal hearing in order to put forth his contentions and submit necessary documents, the 2nd respondent without considering the same, has proceeded to pass the impugned ex-parte order which is violative of the principles of natural justice and the same deserves to be set aside and the 2nd respondent may be directed to pass fresh order after granting an opportunity of personal hearing to the petitioner. It is further submitted that the impugned proceedings initiated pursuant to the impugned show cause notice dated 18.12.2023 is barred by limitation under Section 73(10) of the KGST Act and as such, the availability of equivalent, efficacious and alternative remedy by way of filing of an appeal under Section 107 of the CGST / KGST Act would not come in the way of the petitioner prosecuting the present petition.

Per contra, learned HCGP for the respondents – revenue submits that the period of limitation has been extended by the respondents vide Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively and as such, it cannot be said that the proceedings are barred by limitation. HC-KAR NC: 2025:KHC:45469

Learned counsel for the petitioner would invite my attention to the Petition in Special Leave Appeal (C) No. 4240/2025 pending before the Apex Court in order to contend that the validity of such Notifications are seized by the Apex Court and pending adjudication.

In view of the aforesaid facts and circumstances and the submissions made by both sides will indicate that the validity of the aforesaid Notifications are seized by the Apex Court which will have an impact / bearing on the impugned proceedings, I am of the view that one more opportunity is required to be granted in favour of the petitioner by setting aside the impugned adjudication order and remitting the matter back to the respondents for reconsideration afresh in accordance with law.

Under these circumstances, in order to avoid multiplicity of proceedings and to ensure that there are no conflicting orders, I deem it just and appropriate to direct the 2nd respondent to reconsider the matter afresh and pass a fresh adjudication order in accordance with law after disposal of Special Leave to Appeal (C) No.4240/2025 by the Apex Court.

In the result, I pass the following:- ORDER (i) Petition is hereby allowed, subject to payment of cost of Rs.10,000/- to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks from today. HC-KAR NC: 2025:KHC:45469 (ii) The impugned orders at Annexure B1 and B2 both dated 17.04.2024 passed by the 2nd respondent are hereby set aside. (iii) The matter is remitted back to the 2nd respondent for reconsideration afresh and pass a fresh adjudication order in accordance with law after disposal of SLP No.4240/2025. (iv) The period between the date of the impugned order i.e., 17.04.2024 and the date on which the Apex Court passes orders would be excluded for the purpose of limitation.”

Under these identical circumstances, I deem it just and appropriate to allow the present petition also in terms of the aforesaid judgment of this Court.

Accordingly, I pass the following:- ORDER (i) Petition is hereby allowed, subject to payment of cost of Rs.10,000/- to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks from today.