M/S Sri Bhuvaneshwari Constructions vs. Principal Commissioner Of Central Tax
Original PDF →Facts
The petitioner, M/s. Sri Bhuvaneshwari Constructions, filed a writ petition before the High Court of Karnataka challenging a Show Cause Notice (SCN) dated April 23, 2021, issued by the Principal Commissioner of Central Tax (Respondent No. 1) under Section 73 of the Finance Act, 1994, and an Order-in-Original dated October 22, 2024, passed by the same authority. The petitioner sought to set aside both the SCN and the Order-in-Original, or alternatively, a direction for fresh adjudication. The State of Karnataka was also listed as Respondent No. 2. The SCN was issued under DIN: 2021045YU000000F03E, and the Order-in-Original under DIN: 20241057YU0000006400.
Held
The High Court held that the issue in controversy was directly covered by a judgment of a co-ordinate bench in M/s. Karnataka Chinmaya Seva Trust Vs. Joint Commissioner of Central Tax. Following that precedent, the Court ordered that writ petitions challenging show-cause notices would be relegated to the designated officers to be considered at the same stage. For writ petitions challenging Orders-in-Original, the Orders-in-Original were set aside, and the matters were relegated to designated officers for reconsideration from the stage of the show-cause notice. The petitioners were granted liberty to file pleadings within a reasonable time. Consequently, the impugned Order-in-Original dated 22.10.2024 was set aside, and the matter was remitted back for reconsideration to the stage of the show cause notice dated 26.04.2021. The ratio decidendi is that challenges to SCNs and Orders-in-Original under GST law should be reconsidered from the SCN stage by designated officers, as per established precedent.
Key Issues
1. Whether the Show Cause Notice (SCN) bearing Ref.No. dated 26.04.2021 and bearing SCN No. 72/2021-22 dated 23.04.2021, issued by Respondent No.1 under Section 73 of the Finance Act, 1994, is liable to be set aside? 2. Whether the Order-in-Original dated 22.10.2024 bearing DIN: 20241057YU0000006400, passed by Respondent No.1, is liable to be set aside? 3. If the above demands are not set aside in toto, should Respondent No.1 be directed to adjudicate the matter afresh? The petitioner contended that both the SCN and the Order-in-Original should be set aside, or the matter should be remanded for fresh adjudication. The respondents' arguments are not explicitly recorded in the provided text, but they are represented by counsel.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs:
“a) Issue a writ of Certiorari setting aside the Show Cause Notice bearing Ref.No.dated 26.04.2021 bearing SCN bearing No.72/2021-22 dated 23.04.2021 (DIN: 2021045YU000000F03E) issued by the Respondent No.1 under Section 73 of the Finance Act, 1994 (Annexure-A);
b) Issue a writ of certiorari setting aside the Order-in- Original dated 22.10.2024 bearing DIN: 20241057YU0000006400 bearing Order No.39/2024-25 (Pr.Commr) passed by Respondent No.1 (Annexure-B);
c) Alternatively, in the event that the demands under Show Cause Notice bearing DIN: 20210457YU000000F03E, bearing SCN bearing No. 72/2021-22 dated 23.04.2021 issued by the Respondent No.1 (Annexure-A) and Order-in-Original dated 22.10.2024 bearing DIN: 20241057YU0000006400, bearing Order No. 39/2024-25 (Pr.Commr) passed by Respondent No.1 (Annexure-B) are not set aside in toto, then the Petitioner respectfully prays for a writ of Mandamus, directing Respondent No.1 to adjudicate the matter afresh; and d) Grant such other orders that this Hon’ble Court deems fit and proper in the interest of justice.”
Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. NC: 2025:KHC:16977
Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of the Co-ordinate Bench of this Court in the case of M/s.Karnataka Chinmaya Seva Trust Vs. Joint Commissioner of Central Tax in WP No.11154/2023 & connected matters dated 03.07.2024, wherein it was held as under; "
Accordingly, the following: ORDER In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the same stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off. Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-in-Original, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in Column No.2 of the table relating to challenge to Orders-in-Original are disposed off. NC: 2025:KHC:16977 The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders-in-original in question would also receive the same treatment, i.e. be set aside as per the directions made above. Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."
Under these circumstances, the present petition is also disposed of in terms of the aforesaid judgment of the Co-ordinate Bench of this Court.
Accordingly, the impugned Order-in-original at Annexure – B dated 22.10.2024 is hereby set aside and the matter is remitted back for reconsideration to the stage of show cause notice at Annexure-A dated 26.04.2021. Ordered accordingly. (S.R.KRISHNA KUMAR) JUDGE
SV List No.: 2 Sl No.: 89
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.