M/S. Star Steels vs. State Of Karnataka - Karnataka High Court, 09 April 2025

Cause title — parties, addresses and appearances

- 1 - NC: 2025:KHC:15378 WP No. 28949 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.28949 OF 2024 (T-RES) BETWEEN: M/S. STAR STEELS NO.456, MAZID ROAD, PEENYA 1ST STAGE, BENGALURU – 560 058. (REPRESENTED BY PROPRIETOR SRI. MAHOBOOB GHOUSE SYED) …PETITIONER (BY SRI. APRAMEYA K., ADVOCATE FOR SRI. ATUL KRISHNA RAO ALUR, ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, DEPARTMENT OF FINANCE. GOVERNMENT OF KARNATAKA, AMBEDKAR VEEDHI, BENGALURU - 560 001. 2. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-6, 2ND FLOOR, TTMC COMPLEX, BMTC BUS STAND, SHANTHINAGARA, BENGALURU - 560 027. 3. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO -075, DGSTO-06, KIADB BUILDING, 1ST FLOOR, 14TH CROSS, PEENYA 2ND STAGE, BENGALURU - 560 058. …RESPONDENTS (BY SRI. HEMAKUMAR K., AGA) Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - NC: 2025:KHC:15378 WP No. 28949 of 2024 THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY R-2 U/S 107 (11) OF THE KGST/CGST ACT, AT ANNX-F BEARING GST/AP NO.52/2024-25 DTD. 30.07.2024 FOR THE ASSESSMENT YEAR 2021-22 IN SO FAR AS THE PETITIONER IS CONCERNED 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, the petitioner seeks the following reliefs: “a) Issue a Writ of Certiorari or Writ in the nature of Certiorari quashing the order passed by resp-2 u/s 107 (11) of the KGST/CGST Act, at Annexure-F, bearing GST/AP No.: 52/2024-25 dated: 30.07.2024, for the assessment year 2021-22 in so far as the petitioner is concerned.

b) Issue a Writ of Certiorari or Writ in the nature of Certiorari quashing the order passed by resp-2 u/s 107 (11) of the KGST/CGST Act, at Annexure-G, bearing GST/AP No.: 53/2024-25 dated: 30.07.2024, for the assessment year 2022- 23 in so far as the petitioner is concerned. c) Issue a Writ of Certiorari or Writ in the nature of Certiorari quashing the order passed by resp-2 u/s 107 (11) of the KGST/CGST Act, at Annexure-H, bearing GST/AP No.: 51/2024-25 dated: 30.07.2024, for the assessment year 2023- 24 in so far as the petitioner is concerned. d) Issue Writ of Mandamus or Writ in the nature of mandamus, directing the resp-3 to withdraw the negative blocking of the Electronic credit ledger of the petitioner as per ANNEXURE-B, in so for as the petitioner is concerned. NC: 2025:KHC:15378 e) Issue any other directions as this Hon’ble Court deems fit to pass in the facts and circumstances of the case in the interest of justice and equity including the cost of the Writ Petition.”

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

A perusal of the material on record will indicate that the Electronic Credit Ledger of the petitioner was blocked by the orders at Annexures – C, D and E dated 18.04.2024, 15.04.2024 and 17.04.2024 by invoking Rule 86A of the Karnataka Goods and Services Tax / Central Goods and Services Tax Rules, 2017 (for short ‘the KGST / CGST Rules’). The issue involved in the present petition is directly and squarely covered by the judgment of this Court in the case of K-9-Enterprises Vs. State of Karnataka reported in W.A.No.100425/2023 and connected matters.

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

The operative portion of K-9-Enterprises’s case supra reads as under: NC: 2025:KHC:15378 “11. In the result, we pass the following:- ORDER (i) All the writ appeals are hereby allowed. (ii) The impugned common order dated 27.07.2023 passed by the learned Single Judge in W.P.No.104242/2023 c/w W.P.Nos.104243/ 2023, 104246/2023, 104247/2023, 104250/2023 and 104251/2023 are hereby set aside. (iii) The impugned order dated 27.06.2023 vide Annexure-A in W.P.No.104242/2023; impugned order dated 02.06.2023 vide Annexure-A in W.P.No.104243/2023; impugned order dated 27.06.2023 vide Annexure-A in W.P.No.104246/2023; impugned order dated 27.06.2023 vide Annexure-A in W.P.No.104247/2023; impugned order dated 27.06.2023 vide Annexure-A in W.P.No.104250/2023 and impugned order dated 27.06.2023 vide Annexure- A in W.P.No.104251/2023 are hereby quashed."

In view of the aforesaid dictum of the Division Bench of this Court, I am of the considered opinion that the impugned orders deserves to be quashed. However, having regard to the fact that the impugned orders blocking of the Input tax credit in the Electronic Credit Ledger was passed as long back as on NC: 2025:KHC:15378

15.04.

2024, 17.04.2024 and 18.04.2024, no useful purpose would be served by setting aside / quashing the impugned orders since stipulated period of one year as contemplated under Rule 86A of the KGST / CGST Rules would expire on 17.04.2025. Under these circumstances, the petition stands disposed of in view of the fact that blocking of the Input Tax Credit of Electronic Credit Ledger of the petitioner would expire on 17.04.2025. It is further directed that in the event respondent intends to take further steps against the petitioner, they would do so in terms of the aforesaid judgment of this Court in K-9 Enterprises’s and in accordance with law by following the procedure laid down by this Court in K-9 Enterprises’s case supra. It is also relevant to state that the impugned order under Rule 86A of the KGST / CGST Rules have also merged with Annexures – F, G and H passed by the Appellate Authority.

Subject to the aforesaid observations and directions, the petition stands disposed of. (S.R.KRISHNA KUMAR) JUDGE

SV List No.: 2 Sl No.: 64