Ornate Designs vs. The Commissioner Of Commercial Taxes - Karnataka High Court, 16 October 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:41293 WP No. 17503 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.17503 OF 2025 (T-RES) BETWEEN: ORNATE DESIGNS NO.A/3, HIGH TECH THIRUMALA APARTMENT, 2ND FLOOR, 2ND MAIN BASAVESHWARA LAYOUT NAGASHETTY HALLI, SANJAY NAGAR, BENGALURU – 560 094. REPRESENTED BY ITS PARTNER SRI. YOGENDRA K PARIKH …PETITIONER (BY SMT. MRUDULA GACKWAD, ADVOCATE FOR SRI. D.R.KAPAL GANTI, ADVOCATE) AND: 1. THE COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE BHAVAN, GANDHINAGAR, BENGALURU – 560 009. 2. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES – (AUDIT)-3.7, 2ND FLOOR, BMTC BUS STAND, KH ROAD SHANTINAGAR, BANGALORE – 560 027. …RESPONDENTS (BY SRI. HEMA KUMAR K., AGA) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ADJUDICATION ORDER DATED 26.08.2024 PASSED BY R-2 VIDE NO.ACCT/LGSTO- 150/ASSN-15068-649/2023-24/DRC-07 (413) 2024-25 /168 AND THE DRC-07 BEARING REF NO.ZD2908240919091 ISSUED BY THE R-2 IS ENCLOSED AS ANNX-D AND E. AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:41293 WP No. 17503 of 2025 CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks the following reliefs:

“(i) Issue writ of certiorari or in the like nature of certiorari quashing the Adjudication order dated 26.08.2024 passed by 2nd respondent vide No. ACCT/LGSTO-150/ASSN-15068-649/2023-24/DRC-07 (413) 2024-25/168 and the DRC-07 bearing Ref No. ZD2908240919091 issued by 2nd respondent is enclosed as Annexures – D and E;

(ii) Issue writ of mandamus and directing the respondents to consider the returns filed by the petitioner are correct and grant Input Tax benefit claimed by the petitioner and (iii) Issue writ of prohibition, not to proceed further steps or measures or any such kind of initiatives pertaining to recovery(s) over the impugned Adjudication order dated 26.08.2024 passed by 2nd respondent vide No. ACCT/LGSTO-150/ASSN-15068-649/2023-24/DRC-07 (413) 2024-25/168 and the DRC-07 bearing Ref No. ZD2908240919091 issued by 2nd respondent is herewith enclosed as Annexures - D and E;.

(iv) Pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of this case, in the interest of justice and equity.” HC-KAR NC: 2025:KHC:41293

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

A perusal of the material on record will indicate that the petitioner filed its Return of Turnovers for tax periods 2019-20. The respondent initiated proceedings under CGST/KGST Act, 2017 and issued intimation notice to the petitioner to file reply. Subsequently, the 2nd respondent issued show-cause notice dated 31.05.2024 in Form GST DRC-01 as per Section 73(1) of KGST Act, calling for explanation with regard to utilization of excess input tax credit. The petitioner filed its reply dated 31.05.2024 to the aforesaid show- cause notice. Pursuant to the same, the 2nd respondent without considering the reply filed by the petitioner and not providing the petitioner sufficient opportunity of personal hearing u/s.75(4) of the Act proceeded to pass the impugned orders at Annexures – D and E dated 26.08.2024, which are assailed in the present petition.

Learned counsel for the petitioner submits that the petitioner had filed its reply to the show-cause notice dated 31.05.2024 and the respondent without considering the said reply and without granting an opportunity of personal hearing has passed HC-KAR NC: 2025:KHC:41293 the impugned orders at Annexures – D and E dated 26.08.2024 and the impugned orders deserve to be quashed and the matter is remitted back to the respondent for reconsideration of the matter afresh in accordance with law by providing an opportunity to the petitioner to submit a reply to the show cause notice / produce necessary documents and thereafter to pass appropriate orders.

Per contra, learned AGA for the respondents would support the impugned orders and submit that there is no merit in the petition and the same is liable to be dismissed, especially when the petitioner did not exercise his due diligence in participating in the impugned proceedings.

A perusal of the material on record including the impugned orders will indicate that it is an undisputed fact that the petitioner filed its reply to the show-cause notice and the impugned orders have been passed without granting an opportunity to the petitioner to produce necessary documents. Under these circumstances, in view of the 2nd respondent failing to provide an opportunity for the petitioner to provide a reasonable opportunity to produce necessary documents by adopting a justice oriented approach and in order to provide one more opportunity to the HC-KAR NC: 2025:KHC:41293 petitioner, I deem it just and appropriate to set aside the impugned orders and remit the matter back to the 2nd respondent for reconsideration afresh in accordance with law by issuing certain directions.

In the result, I pass the following: ORDER (i) The petition is hereby allowed.

(ii) The impugned orders passed by 2nd respondent at Annexures – D and E dated 26.08.2024, is hereby set aside; (iii) The petitioner shall appear before the 2nd respondent on 20.11.2025, on which date, he shall submit his reply to the show cause notice along with relevant documents. (iv) Upon the petitioner submitting a reply along with relevant documents to the Show Cause Notice on 31.05.2024, the 2nd respondent shall afford a reasonable opportunity to the petitioner and hear it and proceed further in accordance with law. (S.R.KRISHNA KUMAR) JUDGE SV; List No.: 2 Sl No.: 3