M/S Bhuwalka And Sons PVT LTD vs. The Addl Commissioner Of Commercial Taxes
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:- “(i) Issue a writ of certiorari or a declaration in the nature of writ of certiorari quashing the order dated 02.07.2021 passed by the Addl. Commissioner of Commercial Taxes, Zone-II, Bengaluru, the first respondent herein, in No.ADCO/ZONE-II/APP- 4/GST/SMR-02/2020-21 under section 108(1) of the KGST Act and CGST Act in the case of the petitioner and restore the order passed by the Joint Commissioner of Commercial Taxes (Appeals)-4 Bengaluru in GST.AP.278/2019-20 dated 14.09.2020 under section 107(11) of the KGST Act and CGST Act – ANNEXURE – H. (ii) and grant such other relief or reliefs as this Hon’ble Court may deem fit in the circumstances of the case, in the interest of justice.” HC-KAR NC: 2025:KHC:44772
Heard learned counsel for the petitioners and learned AGA for the respondents and perused the material on record.
A perusal of the material on record will indicate that on 26.06.2019 and 28.06.2019, business premises of the petitioner having been inspected and proposition notice dated 28.06.2019 was issued by respondent No.2 under Section 122(1)(xviii) of the KGST/CGST Act, proposing to levy penalty on the petitioner due to difference in stock. The petitioner having submitted reply dated 17.07.2019, respondent No.2 proceeded to pass order dated 16.08.2019 levying penalty upon the petitioner, but the petitioner filed an appeal before the Joint Commissioner / the First Appellate Authority, who allowed the appeal vide final order dated 14.09.2020. Thereafter, respondent No.1 – Revisional Authority invoked powers vested under Section 108 of the KGST Act dated 25.03.2021 proposing to review by way of a suo moto revision, which was contested by the petitioner culminating in the impugned order dated 02.07.2021 passed by respondent No.1, reversing the order passed by the First Appellate Authority and restoring the order passed by the Revisional Authority. Aggrieved by the HC-KAR NC: 2025:KHC:44772 impugned order passed by respondent No.1 – Revisional Authority, the petitioner is before this Court by way of the present petition.
A perusal of the order of the First Appellate Authority will indicate that the same is cryptic, unreasoned and passed without considering the material on record, as can be seen from paragraph No.5 of the order of the First Appellate Authority, which reads as under:
“5. The Respondent Authority in the impugned order has arrived at the shortage of stock based on the quantity given by the Appellant. The Respondent authority has implied that shortage of goods estimated have been removed or supplied by the Appellant without any valid tax invoices and other documents and hence has imposed penalty provided under Section 122(1) of KGST/CGST Act, 2017. There is no basis or any evidence for Respondent to arrive at the conclusion that goods have been supplied except the fact, that the shortage had been arrived at by estimation of the physical stock, no other evidence whether documentary or otherwise had been unearthed by the Department in support of the charge that quantity found short had been removed or supplied by the appellant without valid tax invoice and other documents and without payment of taxes and that the appellant had received payment from the customers for the short HC-KAR NC: 2025:KHC:44772 quantity alleged to have been removed/supplied by the appellant. The said finding was based only on surmises and not based on any concrete evidence. Therefore, the impugned order imposing penalty on the appellant is bad in law and thus liable to be set aside.”
However, while passing the impugned order, respondent No.1 – Revisional Authority has also proceeded to revise the said order of the Appellate Authority without considering the facts, various contentions, documents etc., and material on record and consequently, I deem it just and appropriate to set aside the impugned order at Annexure-H dated 02.07.2021 as well as order passed by the First Appellate Authority dated 14.09.2020 and remit the matter back to the First Appellate Authority – Joint Commissioner of Commercial Taxes (Appeals)-4, Bengaluru, for reconsideration of the appeal filed by the petitioner, in accordance with law by leaving open all contentions.
In the result, I pass the following: ORDER (i) The petition is allowed. (ii) The impugned orders at Annexures-E dated 02.07.2021 passed by respondent No.1 and the HC-KAR NC: 2025:KHC:44772 impugned order at annexure-H dated 14.09.202 passed by the First Appellate Authority are hereby set aside. (iii) The matter is remitted back to the First Appellate Authority – the Joint Commissioner of Commercial Taxes (Appeals)-4, Bengaluru. (iv) Liberty is reserved in favour of the petitioner to submit pleadings, documents etc., to the First Appellate Authority – the Joint Commissioner of Commercial Taxes (Appeals)-4, Bengaluru who shall consider the same, hear the petitioner, provide sufficient opportunity to the petitioner and proceed further, in accordance with law. (S.R.KRISHNA KUMAR) JUDGE
BMC List No.: 2 Sl No.: 2
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.