M/S Teju Interiors vs. The Commercial Tax Officer (Audit)-1.7
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Cause title — parties, addresses and appearances
ORDER BEARING NO. CTO(AUDIT)-1.7/ADJ-37/123/2024-25 DATED 01.06.2024 ISSUED BY THE FIRST RESPONDENT UNDER SECTION 73(9) OF THE GST ACT FOR THE YEAR 2020-21 ALONG WITH THE SUMMARY OF THE ORDER IN FORM GST DRC- 07 VIDE ANNEXURE –C; TO QUASH THE RECOVERY NOTICE BEARING NO. CTO(AUDIT)-1.7/T-94/2025-26 DATED 28.5.2025 ISSUED BY THE FIRST RESPONDENT TO THE THIRD RESPONDENT VIDE ANNEXURE–F AND FURTHER DIRECTING THE FIRST RESPONDENT TO AFFORD REASONABLE OPPORTUNITY TO PETITIONER TO FILE REPLIES TO THE SHOW CAUSE NOTICE NO.CTO(AUDIT)-1.7/498/2023-24 DATED 16.11.2023 ISSUED BY THE FIRST RESPONDENT FOR THE YEAR 2020- 21 VIDE ANNEXURE- B AND CONSIDER THE SAME IN ACCORDANCE WITH LAW AND ALSO DIRECTING THE SECOND RESPONDENT TO PASS AN ORDER UNDER SECTION 6 OF THE GST ACT ASSIGNING AND AUTHORIZING THE FIRST RESPONDENT OR ANY OTHER OFFICER OF THE RESPONDENT DEPARTMENT TO INITIATE PROCEEDINGS UNDER SECTION 73 TOGETHER FOR ALL THE THREE YEARS VIZ., 2020-21, 2021-22 AND 2022-23 AND AFFORD REASONABLE OPPORTUNITY TO PETITIONER TO FILE REPLIES IN SUPPORT OF THE CLAIMS MADE IN GST RETURNS, TO MEET THE ENDS OF JUSTICE.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR HC-KAR NC: 2025:KHC:40506 ORAL ORDER In this petition, the petitioner seeks following reliefs:
(a) Issue a writ of certiorari or a writ in the nature of certiorari quashing the impugned adjudication order bearing No.CTO(AUDIT)- 1.7/ADJ-37/123/2024-25 dated 01.06.2024 issued by the first Respondent under Section 73(9) of the GST Act for the year 2020-21 along with the summary of the order in Form GST DRC-07 vide Annexure-C;
(b) Issue a writ of certiorari or a writ in the nature of certiorari quashing the recovery notice bearing No.CTO(AUDIT)-1.7/T-94/2025- 26 dated 28.05.2025 issued by the first Respondent to the third respondent vide Annexure-F;
(c) Issue a writ of mandamus or a direction in the nature of mandamus directing the first respondent to afford reasonable opportunity to petitioner to file replies to the show cause notice No. CTO(AUDIT)-1.7/498/2023-24 dated 16.11.2023 issued by the first Respondent for the year 2020-21 vide Annexure-B and consider the same in accordance with law.
(d) Issue a writ of mandamus or a direction in the nature of mandamus directing the second respondent to pass an order under Section 6 of the GST Act assigning and authorizing the first respondent or any other office of the respondent department to initiate proceedings HC-KAR NC: 2025:KHC:40506 under Section 73 together for all the three years viz., 2020-21, 2021-22 and 2022-23 and afford reasonable opportunity to petitioner to file replies in support of the claims made in GST returns, to meet the ends of justice; and (e) Issue any other writ or direction as this Hon’ble Court deems fit on the facts and in the circumstances of the case.
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 first respondent issued an intimation in DRC-1A dated 29.09.2023 pursuant to which the second respondent issued a show-cause notice dated 16.11.2023 under Section 73(1) of the CGST/KGST Act 2017, read with rule 142(1) of the CGST/KGST Rules, 2017 to the petitioner alleging that there was difference in availment of ITC between GSTR3B and GSTR1 who did not issue any reply/response to the same. Since the petitioner did not submit his reply to the said show-cause notice also, the HC-KAR NC: 2025:KHC:40506 first respondent proceeded to pass the impugned order dated 01.06.2024 under Section 73(9) of the CGST/KGST Act, 2017 confirming the total demand of Rs.51,44,088/- including the tax, interest and penalty. In pursuance of the same, the first respondent issued notice in Form GST DRC-13 dated 31.08.2024 directing attachment of the petitioner's bank accounts for recovery of the alleged tax dues pursuant to which the petitioner realised regarding the ex-parte proceedings and the consequent ex-parte order.
Learned counsel for the petitioner submits that neither the pre-intimation notice under Rule 142(1) nor the show-cause notice under Section 73(1) of the CGST/KGST Act, 2017 that were addressed to the business premises of the petitioner were communicated or served upon the petitioner and he was not aware of the said proceedings, as the petitioner had shut down the said business and the same went unnoticed by the petitioner and consequently, he was not in a position to submit a HC-KAR NC: 2025:KHC:40506 reply to the same or contest the proceedings, which culminated in the impugned ex-parte order. It is submitted that the petitioner was not aware of the impugned proceedings till he received the notice in GST DRC-13 dated 31.08.2024 directing the attachment of its bank accounts and hence the petitioner having no option has approached 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. HC-KAR NC: 2025:KHC:40506
Though several contentions have been urged by both sides as regards to the petitioner not having received the pre- intimation notice and show-cause notice and his inability and omission to contest the proceedings, it is a matter of record and an undisputed fact that the petitioner did not submit his reply to the show-cause notice or pre- intimation notice nor contested the proceedings, which 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 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 order dated 01.06.2024 and remitting the matter back to the first respondent for reconsideration of the matter afresh in accordance with law to the stage of HC-KAR NC: 2025:KHC:40506 petitioner submitting reply to the impugned show-cause notice.
In the result, I pass the following: ORDER
(i) The petition is hereby allowed.
(ii) The impugned order dated 01.06.2024 passed by the first respondent under Section 73(9) of the CGST/KGST Act, 2017 at Annexure-C is hereby set aside.
(iii) The matter is remitted back to the first respondent for reconsideration afresh in accordance with law.
(iv) The petitioner is directed to appear before the first respondent on 17.11.2025, without awaiting further notice from the first respondent failing which the present order shall stand automatically recalled.
(v) Liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the first respondent who shall provide sufficient and reasonable opportunity to HC-KAR NC: 2025:KHC:40506 the petitioner and hear and proceed further in accordance with law. (S.R.KRISHNA KUMAR) JUDGE
MPK List No.: 2 Sl No.: 13
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.