M/S Happymongo Online Solution Private LTD vs. State Of Karnataka
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Cause title — parties, addresses and appearances
ORDER OF ADJUDICATION BEARING FILE NO. DCCT(A)-4.5/DGSTO- 4/ADJUDICATION/NO.21/SCN/2023-24 DATED 18.12.2023 ALONG WITH SUMMARY OF THE ORDER U/S 73(9) DATED 18.12.2023 ISSUED / PASSED IN FORM GST DRC-07 BY THE 2ND RESPONDENT (ANNEXURE-B) AND THE NOTICE ISSUED BY THE COURT OF SPECIAL JMFC (SALES TAX), BANGALORE PENDING ON THE FILE OF CR.MISC. 105/2025 (ANNEXURE- C)
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks the following reliefs:
" a) Issue a writ or order or direction in the nature of Certiorari quashing the impugned Show Cause Notice along with Summary of the Show Cause Notice bearing File No.DCCT(A)-4.5/DGSTO-4/Adjudication/No.21/SCN/2023- 24 dated: 05.06.2023 issued in FORM GST DRC-01 by the 2nd Respondent (Annexure-'A') the impugned ex-prate Order of Adjudication bearing File No.DCCT (A)-4.5/DGSTO- 4/Adjudication/No.21/SCN/2023-24 dated: 18.12.2023 issued/passed in FORM GST DRC-07 by the 2nd Respondent (Annexure-'B') and the Notice issued by the HC-KAR NC: 2025:KHC:40171 Court of Special JMFC (Sales Tax), Bangalore pending on the file of Cr.Misc.105/2025(Annexure-'C');
b) Issue a writ or order or direction in the nature of nay writ by setting aside the tax demand of Rs.9,76,743/- along with interest of Rs.9,81,626/- and penalty of Rs.97,674/- confirmed in the impugned ex parte Order of Adjudication bearing File No. DCCT(A)-4.5/DGSTO- 4/Adjudication/No.21/SC/2023-24 dated: 18.12.2023 along with Summary of the Order U/s 73(9) dated: 18.12.2023 issued/passed in FORM GST DRC07 by the 2nd Respondent (Annexure-'B')
c) Pass such other order(s) or direction(s) as deemed fit and proper in the facts and circumstances of the case in the interest of justice."
Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.
A perusal of material on record will indicate that pursuant to an Intimation 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 dated 05.09.2023 and sought for personal hearing. Subsequently, the 2nd respondent passed an adjudication order dated 18.12.2023 under Section 73(9) of the HC-KAR NC: 2025:KHC:40171 CGST / KGST Act confirming a total demand of Rs.9,76,743/- along with interest of Rs.9,81,676/- and a penalty of Rs.97,674/- without granting an opportunity of personal hearing to the petitioner. Thereafter, the 2nd respondent initiated recovery proceedings against the petitioner in Crl.Misc.105/2025 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 fresh order after granting an opportunity of personal hearing to the HC-KAR NC: 2025:KHC:40171 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 the said Notifications are seized by the Apex Court and pending adjudication before the Hon’ble Supreme Court. HC-KAR NC: 2025:KHC:40171
In view of the aforesaid facts and circumstances and the submissions made by both sides which will indicate that the validity of the aforesaid Notifications are seized by the Apex Court and 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 by issuing certain directions.
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:40171 (ii) The impugned order at Annexure-B dated 18.12.2023 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 pending before the Apex Court.
(iv) The period between the date of the impugned order i.e., 18.12.2023 and the date on which the Apex Court disposes of the aforesaid SLP No.4240/2025 shall stand excluded for the purpose of limitation. (S.R.KRISHNA KUMAR) JUDGE
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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.