Diverse Retails Private Limited vs. State Of Karnataka - Karnataka High Court, 05 June 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:19127 WP No. 4007 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 4007 OF 2025 (T-RES) BETWEEN: DIVERSE RETAILS PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, AKR TECH PARK, A BLOCK, HAVING ITS OFFICE AT NO.112, 7TH MILE, HOSUR ROAD, KRISHNA REDDY INDUSTRIAL AREA, BANGALORE 560068. REPRESENTED BY ITS AUTHORIZED SIGNATORY, MR. DEVANGAM NAGARAJU KISHORE KUMAR. …PETITIONER (BY SRI. SYED KHAMRUDDIN.,ADVOCATE) AND: 1. STATE OF KARNATAKA DEPARTMENT OF FINANCE, VIDHANA SOUDHA, BENGALURU 560 001. 2. THE GOODS AND SERVICES TAX COUNCIL 5TH FLOOR, TOWER II, JEEVAN BHARATI BUILDING, Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:19127 WP No. 4007 of 2025 JANPATH ROAD, CONNAUGHT PALACE, NEW DELHI REPRESENTED BY ITS CHAIRMAN. 3. ASSITANT COMMISSIONER OF COMMERCIAL TAX (LGSTO-016) 1ST FLOOR, RAJENDRA NAGAR, KORAMANGALA, BENGALURU 560 047. …RESPONDENTS (BY SMT.JYOTHI M.M., HCGP FOR R1 AND R3; SRI. ARAVIND V CHAVAN, ADVOCATE FOR R2) THIS WP IS FILED UNDER ARTICLES 226 OF THE CONSTITUITON OF INDIA PRAYING TO 1) DECLARE THAT THE NOTIFICATION NO. 25/2023 ISSUED BY THE 1ST RESPONDENT, AS VIOLATIVE OF THE PROVISIONS OF SECTION 168A, ARBITRARY, EX-FACIE ILLEGAL AND WITHOUT JURISDICTION (ANNEXURE-A); 2) QUASH THE

ORDER OF ADJUDICATION U/S 73(9) OF THE KGST/CGST ACT DATED 25.04.2024 BEARING NO. ACCT/LGSTO-16/DRC-07/2024-25 PASSED BY THE 3RD RESPONDENT (ANNEXURE-B) AND CONSEQUENTLY, SUMMARY ORDER DATED 29.04.2024 UNDER FORM GST DRC-07 ISSUED BY THE 3RD RESPONDENT (ANNEXURE-B1). 3) DIRECT THE 3RD RESPONDENT TO REFUND THE PETITIONER TO THE EXTENT OF RS.25,52,552/- WHICH WAS DEBITED IN THE ELECTRONIC CREDIT LEDGER OF THE PETITIONER PURSUANT TO ANNEXURE B AND B1. HC-KAR NC: 2025:KHC:19127 THIS PETITION, COMING ON FOR ORDERS, 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 Order of Adjudication dated 25.04.2024 [Annexure-B] under Section 73 (10) read with Section 73(9) and 50 of the Karnataka Goods and Services Tax Act/Central Goods and Services Tax Act, 2017 and Rule 142 of the Karnataka Goods and Services Tax Rules, 2017 [for short, 'KGST/CGST Act'] and the Summary of such order in Form GST DRC - 07 [Annexure-B1]. This Court on 12.02.2025 has granted interim order staying the operation of these two impugned orders.

Sri Syed Khamruddin, the learned counsel for the petitioner, submits that as could be seen from DRC-03 the petitioner has discharged the liability but the same has not been considered while passing the impugned Order of Adjudication. The learned counsel HC-KAR NC: 2025:KHC:19127 submits that the petitioner is also aggrieved by the Notification dated 29.12.2023 [Annexure-A] issued by the State extending the period under Section 73 of the KGST/CGST Act vide Annexure-A, but for the present the petitioner's grievance could be addressed if the impugned Order of Adjudication and the Summary thereof are quashed restoring the proceedings directing the third respondent to consider the petitioner's cause in terms of the details available in DRC-03. The learned counsel emphasizes that this Court may reserve liberty to the petitioner to urge as against the Notification dated 29.12.2023 if there is occasion for the same despite consideration of the petitioner's case as aforesaid.

Both Mr. Arvind V. Chavan, a learned standing counsel for the second respondent, and Mrs.Jyoti M.M., the learned High Court Government Pleader for the first and third respondents, are heard in the light of these submissions. If there could be an HC-KAR NC: 2025:KHC:19127 adjudication on the factual matrix with the petitioner relying upon the details in DRC-03, this Court is of the considered view that such adjudication must be enabled especially if the details in DRC-03 are not considered, leaving open the petitioner's grievance as against the Notification dated 29.12.2023 to be considered if there is occasion for the same. In the light of the afore, the petition is allowed-in-part quashing the Order of Adjudication dated 25.04.2024 [Annexure-B] and the Summary thereof [Annexure B1] restoring the proceedings for reconsideration with liberty to the petitioner to file further reply by 30.06.2025. (B M SHYAM PRASAD) JUDGE

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