BharatTaxGST

M/S R K R Exports vs. State Of Karnataka

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WP/11169/2025HC KarnatakaGSTCNR KAHC01022237202509 June 2025Bench: B M SHYAM PRASAD5 pages
For Petitioner: SRI. CHERIAN PUNNOOSE, ADVOCATEFor Respondent: SMT. JYOTI M.M., HCGP

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Cause title — parties, addresses and appearances
- 1 - HC-KAR NC: 2025:KHC:19368 WP No. 11169 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 11169 OF 2025 (T-RES) BETWEEN: M/S R K R EXPORTS MS. KAVYA VISHWANATH, PROPRIETRESS, FF-02, INCLOVER TULIP, 1ST FLOOR, 5TH MAIN ROAD, VIVEK NAGAR, BENGALURU-560047 …PETITIONER (BY SRI. CHERIAN PUNNOOSE, ADVOCATE) AND: 1. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU-560001 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA, VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BENGALURU-560009 3. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO-015, NO.201, 2ND FLOOR, VTK-2, KORAMANGALA, BENGALURU-560047 4. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:19368 WP No. 11169 of 2025 (AUDIT)-4.4, DGSTO-4, 5TH FLOOR, TTMC BUILDING, BMTC BUS STOP, 80FT ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU-560095 …RESPONDENTS (BY SMT. JYOTI M.M., HCGP) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DTD. 21.03.2024 AND SUMMARY OF THE ORDER IN FORM GST DRC-07 DTD. 22.03.2024 PASSED BY THE R-3 DEMANDING RS.16,81,246/- VIDE ANNX-A TO THE WRIT PETITION. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD

ORAL ORDER

The petitioner has called in question the third respondent's order dated 21.03.2024 under Section 73 of the Karnataka Goods and Services Tax Act, 2017 [for short, 'the KGST Act']. Mr. Cherian Punnoose, the learned counsel for the HC-KAR NC: 2025:KHC:19368 petitioner, while arguing in support of the petitioner's grievance with this order on 05.06.2025, has emphasized the following.

[a] The impugned order is because of alleged wrongful availment and utilization of excess Input Tax Credit.

[b] This allegation is because of a certain asserted difference between GSTR-3B and GSTR-2A.

[c] This is based on Audit Observations, but ultimately with the petitioner's response, the Final Audit Report is filed opining that there is no wrongful availment or excess utilization, and

[d] The audit observation in this regard is wrong.

2.

Mr. Cherian Punnoose emphasizes that the proceedings under Section 73 of the KGST Act are commenced despite the conclusion in the Final Audit Report and that the petitioner did not respond to the Show Cause Notice as it was only HC-KAR NC: 2025:KHC:19368 uploaded on the portal and not served otherwise. The learned counsel also emphasizes that the third respondent could not have passed the impugned order after having started the audit proceedings.

3.

Ms. Jyoti, M. M., the learned High Court Government Pleader, who is called upon to respond, submits that she cannot deny the factual assertion that the Show Cause Notice and the impugned order are based on which audit observations are initially made. The audit proceedings have resulted in the Final Audit Report in favour of the petitioner.

4.

In the light of this circumstance, and notwithstanding the petitioner's case that the third respondent could not have assumed juri iction which may not be justified, this Court is of the considered view that the petitioner must succeed and the impugned order dated 21.03.2024 [Annexure -A] is quashed. HC-KAR NC: 2025:KHC:19368 The petition is allowed accordingly. (B M SHYAM PRASAD) JUDGE

RB

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.