M/S Soma Enterprises Limited vs. Joint Commissioner Of Commercial Taxes (Appeals-I) - Karnataka High Court, 03 November 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:44030 WP No. 36046 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 36046 OF 2024 (T-RES) BETWEEN: M/S SOMA ENTERPRISES LIMITED, A PUBLIC LIMITED COMPANY INCORPORATED UNDER THE 1956/2013 COMAPNIES ACT, HAVING ITS REGISTERRED ADDRESS NO.9, SOMA MERIT, VENATA SWAMY NAIDU ROAD, TASKER TOWN, SHIVAJINAGAR, BENGALURU, REP BY IS MANAGER B K KUMAR. …PETITIONER (BY SMT LAKSHMI MENON.,ADVOCATE) AND: 1. JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS-I), TTMC BMTC BUILDING, SHANTHIANGAR, BENGALURU - 560027. 2. THE COMMERICIAL TAX OFFICER, AUDIT 1.8 DGSTO 1, 3RD FLOOR, TTMC, BMTC BUILDING, YESHWANTHPUR, BENGALURU - 560 022. 3. M/S GARUDA INFRATECH INDIA PRIVATE LIMITED, NO.2-51/1 FIRST FLOOR, B R NAIDU CASTLE, BHEL CHANDANGAR, HYDERABAD, TELANGANA, INDIA - 500050, REP. BY ITS MANAGING DIRECTOR, INCORPORATED UNDER COMPANIES ACT, 1956. 4. ADDITIONAL COMMISSIONER OF COMMERICAL TAXES, ZONE 1, TTMC, BMTC BUILDING, YESHWANTHPUR, BENGALURU -560 022. Digitally signed by HEMALATHA A Location: HIGH COURTOF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:44030 WP No. 36046 of 2024 …RESPONDENTS (BY SMT JYOTI M MARADI, HCGP FOR R1, R2 & R4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE AND QUASH THE IMPUGNED ORDER PASSED BY R1 UNDER SECTION 107(11) OF THE SGST AND CGST ACT, 2017, BEARING ORDER NO. ZD2906240026784 DATED 31/05/2024 (ANNX-A). THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, the petitioner seeks following reliefs:

“a) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside the Pre-intimation notice under FORM GST DRC-01A dated 09.05.2023, issued by the Commercial Tax Officer (Audit)-1.8.; (ANNEXURE - A);

b) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside the Show Cause Notice SCN bearing Reference No. CTO(Audit)- 1.8/Adjudication/2023-24 dated 29.05.2023, issued by Respondent no.2; (ANNEXURE - B);

c) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Order passed by Respondent no. 2 under section 73(9) of the IGST, SGST and CGST Act, 2017, bearing Order No. HC-KAR NC: 2025:KHC:44030 CTO(AUDIT)-1.8/GST/DRC-7/No.21/2023-2024 dated 24.08.2023; (ΑΝΝΕXURE - C)

d) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Summary Order passed by Respondent no. 2 under FORM GST DRC-07, bearing Reference No.: ZD2908230375626 dated 24.08.2023; (ANNEXURE-C1)

e) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Impugned Order passed by Respondent no. 1 under section 107(11) of the SGST and CGST Act, 2017, bearing Order No. ZD2906240026784 dated 31.05.2024; (ANNEXURE-G)

f) To direct Respondent no.3 to produce proof of tax paid by them. being such amounts collected by the Petitioner to the Department;

g) Alternatively, to direct the Respondent Nos. 1 & 2, to initiate the appropriate proceedings against the Respondent no.3 including the recovery of such sums now imposed against the petitioner, if this Hon'ble Court deems so fit and necessary”

Heard learned counsel for the petitioner and learned HCGP for the respondents and perused the material on record. HC-KAR NC: 2025:KHC:44030

A perusal of material on record will indicate that pursuant to notice in Form GST DRC-01A dated 09.05.2023, the second respondent issued an intimation notice under Form GST DRC-01A dated 29.05.2023 to the petitioner, who did not issue any reply/response to the same. Subsequently, the second respondent issued a show-cause notice dated_29.05.2023 under Section 73(1) of the CGST/KGST Act, 2017 alleging that payment of interest on delayed payment of output tax on outward supplies declared belatedly in monthly returns of subsequent return periods. Since the petitioner did not submit his reply to the said show-cause notice also, the second respondent proceeded to pass the impugned order dated 24.08.2023 under Section 73(5) of the KGST Act, 2017 confirming the total demand of Rs.5,86,25,477/- including the tax, interest and penalty.

Learned counsel for the petitioner submits that due to bonafide reasons and unavoidable circumstances couldn't submit replies/ documents to neither the pre-intimation notice nor the show-cause notice under section 73(1) of the CGST/KGST Act, 2017 and resultantly couldn’t contest the proceedings. Aggrieved by the said order the petitioner having no option has approached HC-KAR NC: 2025:KHC:44030 this Court by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit a reply to the pre-intimation notice and show-cause notice and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause and submits that if one more opportunity is provided, by setting aside the impugned order, the petitioner would submit a reply to the show-cause notice and contest the proceedings.

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

Though several contentions have been urged by both sides, the counsel for the petitioner submits that due to bonafide reasons and unavoidable circumstances and the fact that the petitioner did not file its reply/ documents culminated in the impugned ex-parte order.

Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to HC-KAR NC: 2025:KHC:44030 bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned orders dated 24.08.2023 and 31.05.2024 remitting the matter back to the second respondent for reconsideration of the matter afresh in accordance with law from the stage of petitioner submitting reply to the impugned show-cause notice dated 29.05.2023. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed.

(ii) The impugned orders dated 24.08.2023 passed by the second respondent under Section 73(5) of the KGST Act, 2017at Annexure –C and the impugned order passed by the first respondent under Section 107(11) of the CGST Act and KGST Act at Annexure-G are hereby set aside.

(iii) The matter is remitted back to the second respondent for reconsideration afresh in accordance with law from the stage of petitioner submitting its reply to the notice dated 29.05.2023 issued under section 73(1) of the CGST/KGST Act, 2017 at Annexure –B. HC-KAR NC: 2025:KHC:44030 (iv) The petitioner is directed to appear before the second respondent on 01.12.2025 without awaiting further notice from the second respondent.

(v) The liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the second respondent who shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law, as required under circular 183. (vi) In the event, the Petitioner does not appear before the second respondent on 01.12.2025 as stated supra, present order shall stand automatically recalled without further orders. (S.R.KRISHNA KUMAR) JUDGE

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