M/S Happymongo Online Solution Private Limited vs. State Of Karnataka
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:-
" a) Issue a writ or order or direction in the nature of Certiorari quashing the impugned Show Cause Notice bearing File No. DCCT(A)-4.5/DGSTO-4 /Adjudication/No.22/SCN/2023-24 dated 05.06.2023 along with Summary of the Show Cause Notice bearing Reference No. 202912230498643 dated 18.12.2023 issued in FORM GST DRC-01 by the 2 Respondent (Annexures- 'A'1 & 'A'2), the impugned ex parte Order of Adjudication bearing File No. DCCT(A)-dated 4.5/DGSTO- 4/Adjudication/ No.22/SCN/2024-25 17.04.2024 along with Summary of the Order bearing Reference No: ZD290424042158C dated 18.04.2024 Issued / passed in FORM GST DRC-07 by the 2nd Respondent (Annexures- 'B'1 & 'B'2) and the Notice issued by the Court of Special JMFC (Sales Tax), Bangalore pending on the file of Cr.Misc. 106/2025 (Annexure- 'C'); HC-KAR NC: 2025:KHC:40161 b) Issue a writ or order or direction in the nature of any w by aside the input tax credit of Rs.22,26,61 along with interest of Rs.22,04,346/- and penalty of Rs.2,33,863/- confirmed in the impugned ex parte Order of Adjudication bearing File No. DCCT(A)-4.5/DGSTO 4/Adjudication /No.22/SCN/2024-25 dated 17.04.202 along with of the Order bearing Reference N-ZD290424042158C dated 18.04.2024 issued / passed FORM GST DRC-07 by the 2nd Respondent (Annexure 'B'1 & 'B'2);
c) Pass such other order(s) or direction(s) as deemed fit proper in the facts and circumstances of the case in interest of justice."
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 HC-KAR NC: 2025:KHC:40161 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 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 HC-KAR NC: 2025:KHC:40161 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.
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. HC-KAR NC: 2025:KHC:40161
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:40161 (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. (S.R.KRISHNA KUMAR) JUDGE
Srl.
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.