M/S Seema Caterers vs. The State Of Karnataka
Original PDF →Facts
The petitioner, M/s Seema Caterers, filed a writ petition challenging an adjudication order dated March 30, 2024, and subsequent notices dated September 9, 2024, and October 24, 2024, issued by the Commercial Tax Officer (Audit and Recovery). The adjudication order pertained to the tax period April 2018 to March 2019. The Commercial Tax Officer had issued an observation notice on November 15, 2023, regarding discrepancies between Form GSTR3B and GSTR1, and GSTR3B and GSTR2A. A show cause notice was issued on December 30, 2023. The petitioner claims the show cause notice was not served, leading to an ex-parte adjudication order. The revenue contended that the petition lacked merit as the petitioner did not participate in the proceedings.
Held
The Court allowed the writ petition. It held that the impugned adjudication order dated March 30, 2024, and the subsequent notices dated September 9, 2024, and October 24, 2024, were to be set aside. The Court reasoned that it was an undisputed fact that the petitioner did not respond to the show cause notice, resulting in ex-parte orders. However, in view of the petitioner's assertion of bona fide reasons, unavoidable circumstances, and sufficient cause for not submitting a reply, and adopting a justice-oriented approach, the Court deemed it appropriate to provide one more opportunity. The matter was remitted back to the respondent for reconsideration from the stage of the petitioner submitting its reply to the show cause notice. Liberty was granted to the petitioner to submit pleadings and documents, which would be considered after providing a reasonable opportunity. The bank was directed to de-freeze the petitioner's account.
Key Issues
1. Whether the impugned adjudication order and subsequent notices are liable to be quashed on the grounds of non-service of the show cause notice and the petitioner's inability to submit a reply due to bona fide reasons and unavoidable circumstances, as per Section 65(6) of the KGST Act, 2017? The petitioner argued that the ex-parte orders were unjust and ultra vires because the show cause notice was not properly served, preventing them from submitting a reply. They contended that the matter should be remitted back to provide an opportunity to submit their reply and relevant documents. The revenue argued that the petition had no merit and should be dismissed, as the petitioner failed to exercise due diligence by participating in the proceedings.
Sections Cited
Section 65(6), Section 79
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER ISSUED BY THE R-2 THE COMMERCIAL TAX OFFICER VIDE ANNEXURE-F BY TREATING IT AS UNJUST, UNFAIR AND ULTRAS VIRES; QUASHING IMPUGNED ORDER DATED 09.09.2024 VIDE FORM GST DRC-13 BEARING NUMBER CTO (A AND R) BANGARPET /97/2024-25 ISSUED BY THE R-2 THE COMMERCIAL TAX OFFICE VIDE ANNEXURE -H BY TREATING IT AS UNJUST, UNFAIR AND ULTRAS VIRES; QUASHING IMPUGNED ORDER DATED 24.10.2024 VIDE NOTICE U/S 79 OF THE KGST ACT 2017 BEARING NUMBER CTIO (A AND R) BPET/125/2024-25 ISSUED BY THE R-2 THE COMMERCIAL TAX OFFICE VIDE ANNEXURE -H1 BY TREATING IT AS UNJUST, UNFAIR AND ULTRAS VIRES ETC. THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: NC: 2025:KHC:14951 CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this writ petition, the petitioner seeks the following reliefs: " (a) Call for relevant records pending on the file of respondents.
(b) Issue an order, direction or a Writ, in the nature of writ of certiorari by quashing impugned Order of Adjudication dated 30.03.2024 for the Tax period April 2018 to March 2019 vide File number JCCT / DGSTO-04 / CTO (Audit & Recovery) Bangarpet / GST (73) / 2690/2023-24 / Adjudication Order issued by the 2nd Respondent The Commercial Tax Officer vide Annexure - F by treating it as unjust, unfair and ultras
(c) Issue an order, direction or a Writ, in the nature of writ of certiorari by quashing impugned Order dated 09.09.2024 vide FORM GST DRC-13 bearing number CTO (A&R) Bangarpet /97/2024-25 issued by the 2nd Respondent-The Commercial Tax Officer vide Annexure - H by treating it as unjust, unfair and ultras vires.
(d) Issue an order, direction or a Writ, in the nature of writ of certiorari by quashing impugned Order dated 24.10.2024 vide Notice U/S.79 of the KGST Act 2017 bearing number NC: 2025:KHC:14951 CTO (A&R) BPET/125/2024-25 issued by the 2nd Respondent The Commercial Tax Officer vide Annexure - H-1 by treating it as unjust, unfair and ultras vires.
(e) And also pass such other order/direction and further orders as may be deemed necessary on the facts and in the circumstances and probabilities of the case, in the interest of justice and equity. "
Heard Sri. Jayakumar S. Patil, learned Senior Counsel appearing for the petitioner and Sri. Hemakumar K., learned Additional Government Advocate for respondent Nos.1 and 2, and perused the material on record.
A perusal of the material on record would indicate that on 15.11.2023, the respondent No.2 issued Observation notice under section 65(6) of the KGST Act 2017, calling for explanation as to the difference/discrepancy between Form GSTR3B and Form GSTR1 as well as difference/discrepancy between Form GSTR3B and Form GSTR2A submitted by the petitioner. Pursuant to the same, on 30.12.2023 the respondent NC: 2025:KHC:14951 issued show cause notice to the petitioner, who did not submit any reply to the same and consequently, the second respondent proceeded to pass the impugned Adjudication Order dated 30.03.2024 produced at Annexure-F to the petition, which is assailed in the present petition.
Learned Senior Counsel for the petitioner submits that due to bona fide reasons and unavoidable circumstances and sufficient cause, the petitioner could not submit his reply to the show cause notice as the show-cause notice was not served to the petitioner and the impugned ex-parte orders deserve to be quashed and therefore, the matter be remitted back to the second respondent for reconsideration afresh in accordance with law by providing an opportunity to the petitioner to submit a reply to the show cause notice along with relevant documents and pleadings etc.
Per contra, learned Additional Government Advocate appearing for the respondent Nos.1 and 2 would support NC: 2025:KHC:14951 the impugned orders and submit that there is no merit in the petition and the same is liable to be dismissed, especially when the petitioner did not exercise his due diligence by participating in the impugned proceedings.
A perusal of the material on record including the impugned orders would indicate that it is an undisputed fact that the petitioner did not respond/reply to the show cause notice and the impugned ex-parte orders have been passed without hearing the petitioner. Under these circumstances, in view of the specific assertion on the part of the petitioner with regard to inability and omission to submit the reply to the show cause notice and participate in the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, 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 orders and remit the matter back to the respondent for NC: 2025:KHC:14951 reconsideration afresh in accordance with law by issuing certain directions.
In the result, I pass the following: ORDER i) The Writ Petition is allowed;
ii) The impugned order passed by respondent at Annexure F dated 30.03.2024 and Notices at Annexure H & Annexure H1, dated 09.09.2024 & 24.10.2024 respectively are hereby set aside; iii) The matter is remitted back to the respondent for reconsideration afresh from the stage of the Petitioner submitting its reply to the show-cause notice dated 30.12.2023 in accordance with law. iv) Liberty is reserved to the petitioner to submit pleadings, documents etc. which shall NC: 2025:KHC:14951 be considered after providing sufficient and reasonable opportunity.
v) Respondent No.3 is directed to de- freeze the account of the petitioner forthwith, immediately upon receipt of the copy of this order. (S.R.KRISHNA KUMAR) JUDGE
sac List No.: 1 Sl No.: 58
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.