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Shri M K Kambaiah vs. State Of Karnataka

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WP/13534/2025HC KarnatakaGSTCNR KAHC01025630202529 April 2025Bench: S.R.KRISHNA KUMAR6 pages
For Petitioner: SMT. LAKSHMI MENON, ADVOCATEFor Respondent: SMT. JYOTI M. MARADI, HCGP FOR R1 TO R4

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Cause title — parties, addresses and appearances
- 1 - NC: 2025:KHC:18019 WP No. 13534 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.13534 OF 2025 (T-RES) BETWEEN: M/S M K KAMBAIAH NO.610, GROUND FLOOR, 6TH CROSS, UPKAR LAYOUT, ULLALU, BANGALORE – 560 091. GSTIN: 29AKKPK7150P2ZD REPRESENTED BY ITS PROPRIETOR, SRI. M.K. KAMBAIAH …PETITIONER (BY SMT. LAKSHMI MENON, ADVOCATE) AND: 1. STATE OF KARNATAKA THROUGH THE PRINCIPAL SECERTARY, FINANCE DEPARTMENT , VIDHANA SOUDHA, BENGALURU – 560 001. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 6.6, DG & STO-06, KIADB BUILDING, 3RD FLOOR, 14TH CROSS, 4TH PHASE, PEENYA 2ND STAGE, BENGALURU – 560 058. 3. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (LEGAL AFFAIRS -3) KARYALAYA 1, GANDHINAGAR, BENGALURU – 560 009. 4. ADDL. COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT), SOUTH ZONE, BENGALURU – 560 047. …RESPONDENTS (BY SMT. JYOTI M. MARADI, HCGP FOR R1 TO R4) Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - NC: 2025:KHC:18019 WP No. 13534 of 2025 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED SHOW CAUSE NOTICE ISSUED BY THE RESPONDENT NO.3 FORM DRC-01 UNDER SEC.74(1) UNDER THE CGST/KGST ACT DATED 29.02.2024 BEARING NO.CCT/ACCT/LA- 3/INS-01/SC/23-24 IS PRODUCED HEREWITH AS (ANNEXURE-C) AND ETC. THIS PETITION, COMING ON FOR ORDERS, 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 the writ of Certiorari or in the nature of certiorari to quash and set aside the impugned Show Cause Notice (hereinafter "SCN") issued by Respondent no.3 Form DRC-01 under Sec 74(1) under the CGST/KGST Act dated 29.02.2024 bearing no.CCT/ACCT/LA-3/Ins-01/SZ/23-24 is produced herewith as (Annexure-C);

b. Issue the writ of Certiorari or in the nature of certiorari, to quash and set aside the impugned the Order-in-Original issued by the Respondent no.2 under Sec 74(9) of the CGST/KGST Act bearing ref. no. File DDCT(A)-6.6/DSTO- 6/order/24-25 dated 27.06.2024 is produced herewith as (Annexure-D); NC: 2025:KHC:18019 c. Issue the writ of Certiorari or in the nature of certiorari, to quash and set aside the impugned Summary Order under Form GST DRC-07 dated 29.06.2024 bearing the Reference No. ZD2906241406011 is produced herewith as (Annexure-D1); d. Pass such other orders as this Hon'ble Court may deem fit in the interest of justice.”

2.

Heard learned counsel for the petitioner and learned HCGP for the respondents and perused the material on record.

3.

A perusal of material on record will indicate that the 3rd respondent issued a pre-intimation notice dated 14.02.2024 under Rule 142(1A) of the CGST/KGST Rules, 2017 to the petitioner and thereafter, issued Show Cause Notice dated 29.02.2024 under Section 74(1) of the CGST Act / KGST Act 2017, to which petitioner submitted a reply dated 18.06.2024. The learned counsel for the petitioner submits that the 2nd respondent without considering the reply filed by the petitioner proceeded to pass the impugned order dated 27.06.2024 under Section 74(9) of the CGST/KGST Act, 2017 confirming the total demand of Rs.1,01,22,508/- including the tax, interest and penalty. NC: 2025:KHC:18019

4.

Learned counsel for the petitioner submits that the petitioner had filed its reply on 18.06.2024 to the Show Cause Notice dated 29.02.2024 and the respondents without considering the said reply and without granting an opportunity of personal hearing has proceeded to pass the impugned order at Annexure–D dated 27.06.2024 and that the impugned order deserves to be quashed and matter be remitted back to the concerned respondent for reconsideration of the matter afresh, in accordance with law by providing an opportunity of personal hearing to the petitioner and thereafter, to pass appropriate orders.

5.

Per contra, learned HCGP for the respondents would support the impugned order and submits that there is no merit in the petition and that the same is liable to be dismissed.

6.

A perusal of the material on record including the impugned order will indicate that it is an undisputed fact that the petitioner filed its reply to the Show Cause Notice and the impugned order has been passed without considering the reply along with documents submitted by the petitioner. Under these circumstances, in view of the respondents failing to consider the reply filed by the petitioner and so also provide reasonable NC: 2025:KHC:18019 opportunity of personal hearing to the petitioner, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner, I deem it just and appropriate to set aside the impugned order and remit the matter back to the concerned respondent for reconsideration afresh in accordance with law by issuing certain directions.

7.

In the result, I pass the following: ORDER i) The petition is hereby allowed; ii) The impugned order at Annexure –D dated 27.06.2024 passed by respondent No.2 is hereby set aside; iii) The matter is remitted back to the stage of submitting reply to the Show Cause Notice at Annexure – C dated 29.02.2024. iv) The petitioner shall appear before the concerned respondent on 26.05.2025, without awaiting further notice, on which date, the petitioner shall submit his reply to the show cause notice along with relevant documents. v) Upon the petitioner submitting reply along with relevant documents to the show cause notice, on 26.05.2025, concerned respondent NC: 2025:KHC:18019 shall provide reasonable opportunity to the petitioner and hear him and proceed further in accordance with law. vi) Liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the concerned respondent, who shall provide sufficient and reasonable opportunity to the petitioner and hear him and proceed further in accordance with law. vii) In the event the petitioner does not appear before the concerned respondent on 26.05.2025, this order shall automatically stand recalled / revived, without further reference to the Bench. (S.R.KRISHNA KUMAR) JUDGE

SV List No.: 11 Sl No.: 5

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.