BharatTaxGST

R K Traders vs. Assistant Commissioner Of Central Tax

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WP/24507/2024HC KarnatakaGSTCNR KAHC01050991202403 April 2025Bench: S.R.KRISHNA KUMAR8 pages
For Petitioner: SRI. SHREEHARI KUTSA, ADVOCATEFor Respondent: SRI. HEMA KUMAR, AGA FOR R-1 TO R-4 SRI. VIGNESH.S.SHETTY, ADVOCATE FOR R-5
AI SummaryAllowed

Facts

The petitioner failed to submit a reply to a show-cause notice and pre-intimation notice, leading to an ex-parte order demanding a significant tax amount. The petitioner claimed non-receipt of notices and sought an opportunity to contest.

Held

The Court, adopting a justice-oriented approach, set aside the ex-parte order and allowed the petitioner one more opportunity to submit their reply and contest the proceedings.

Key Issues

Whether the petitioner was adequately served with the show-cause and pre-intimation notices, and if not, whether they should be granted another opportunity to respond.

Sections Cited

Rule 142(1A), Section 74, Section 74(9), Section 79

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
- 1 - NC: 2025:KHC:14085 WP No. 24507 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 24507 OF 2024 (T-RES) BETWEEN: R K TRADERS REPRESENTED BY ITS PROPRIETOR SRI ISHAQ AHMED KHAN SON OF ANWAR, AGED ABOUT 29 YEARS REGISTERED ADDRESS. NO.2/C, C V ROAD, A LAYOUT, BANNIMANTAP, MYSURU – 570 015. …PETITIONER (BY SRI. SHREEHARI KUTSA, ADVOCATE) AND: 1. ASSISTANT COMMISSIONER OF CENTRAL TAX LGSTO-190, MYSURU BAMBOO BAZAR RANGE, VINAYAMARGA, SIDDHARTHA NAGAR, MYSURU - 570 011. THE JURISDICTIONAL PROPER OFFICER UNDER THE CGST/KGST ACT, 2017. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (ENF.)-1, 2ND FLOOR, SHESHADRI BUILDING, MYSORE CITY CIRCLE, DEWAN ROAD, MYSURU - 570 001. 3. JOINT COMMISSIONER OF COMMERCIAL OF LGSTO-190, BAMBOO BAZAR DIVISION, GST COMMISSIONERATE GST BHAVAN, VINAYAMARGA, SIDDHARTHA NAGAR, MYSURU - 570 011 AN AUTHORITY UNDER THE CGST/KGST ACT, 2017. 4. COMMISSIONER OF COMMERCIAL Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - NC: 2025:KHC:14085 WP No. 24507 of 2024 TAXES (KARNATAKA) BENGALURU VANIJYA TERIGE KARYALAYA 2, NEAR KHB GAMES VILLAGE, 80 FT ROAD, KORAMANGALA, BENGALURU – 560 095. 5. THE BRANCH MANAGER, CANARA BANK, TILANK NAGAR BRANCH, MYSURU TILAK NAGAR, MYSURU – 570 021. …RESPONDENTS (BY SRI. HEMA KUMAR, AGA FOR R-1 TO R-4 SRI. VIGNESH.S.SHETTY, ADVOCATE FOR R-5) THIS W.P IS FILED UNDER ATICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER UNDER RULE 86(A)(1) DATED 17.08.2022 BEARING VIDE ORDER NO. ACCT, LGSTO- 190/MYS/ITC BL NO. 17/ 2022-23 ISSUED BY RESPONDENT NO.1 AND ENCLOSED AS ANNEXURE B. 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 following reliefs:

A. Issue a writ of certiorari or any other suitable writ quashing the order under Rule 86(A)(1) dated 17.08.2022 bearing vide ORDER NO. ACCT, LGSTO-190/MYS/ITC BL No. 17/ 2022-23 issued by Respondent No.1 and enclosed as Annexure B.

B. Issue a writ of certiorari or any other suitable writ quashing the Show Cause Notice under section 29(2) dated 02/02/2023 bearing Ref.No.ZA2902230106205 issued by Respondent No.1 and enclosed as Annexure C. NC: 2025:KHC:14085 C. Issue a writ of certiorari or any other suitable writ quashing the order under section 29(2) dated 21/04/2023 bearing Ref. No.ZA2904230774955 issued by Respondent No.1 and enclosed as Annexure D.

D. Issue a writ of certiorari or any other suitable writ quashing the Show Cause Notice u/s 74 dated 14/06/2023 bearing No. ACCT/LGSTO-190/MYS/T.No./2022-23 along with the summary reference bearing form DRC ZD2906230128293 issued by the Respondent No. 1 01A and enclosed as Annexure H.

E. Issue a writ of certiorari or any other suitable writ quashing the Order u/s 74(9) dated 05/10/2023 bearing File No. ACCT, LGSTO-190/Adj/2023-24 along with the summary bearing reference no. ZD2910230046671 issued by the Respondent No. 1 and enclosed as Annexure K.

F. Issue Writ of Mandamus or any other suitable writ quashing the Notice u/s 79(1)(c) dated 01/06/2024 bearing Ref. No. Of recovery ZD290624001590L issued by Respondent No.1 to the Respondent No. 5 and enclosed as Annexure L.

G. Issue a writ of certiorari or any other suitable writ quashing the Show Cause Notice dated 18/10/2023 bearing Ref. No. ZA291023079220V issued by the Respondent No. 3 and enclosed as Annexure M2. H. Issue a writ of certiorari or any other appropriate writ or order or direction quashing the Order dated 30/10/2023 NC: 2025:KHC:14085 bearing reference no.ZA291023257175M for rejection of application filed for condonation of delay of revocation of application of cancellation of registration issued by Respondent No.3 and enclosed as Annexure M3. I. And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.

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 first respondent issued a pre- intimation notice dated 30.03.2023 under Rule 142(1A) of the CGST/KGST Rules, 2017, to the petitioner, who filed a reply dated 10.04.2023 to the said intimation. Subsequently, the first respondent issued a show-cause notice dated 14.06.2023 under Section 74 of the CGST/KGST Act, 2017. Pursuant to the said show cause notice, the first respondent issued another intimation dated 14.06.2023 under Rule 142(1A) of the CGST/KGST Rules, 2017. Since the petitioner did not submit his reply to the said show-cause notice and intimation, the respondent proceeded to pass the impugned order dated 05.10.2023 under Section 74(9) of the CGST/KGST Act, 2017 confirming the total demand of Rs.4,62,94,340/- including the tax, interest and penalty. NC: 2025:KHC:14085 In pursuance of the same, the first respondent issued notice dated 01.06.2024 under Section 79 of the CGST/KGST Act, 2017 directing attachment of the petitioner's bank accounts for recovery of the alleged tax dues.

4.

Learned counsel for the petitioner submits that the petitioner had replied to the pre-intimation notice dated 30.03.2023 under Rule 142(1A). It is further submitted that the respondent failed to consider the said reply and issued another show-cause notice under 74 of the CGST/KGST Act, 2017 and another pre- intimation under Rule 142(1A) both dated 14.06.2023 which were not communicated or served upon the petitioner and he was not aware of the said proceedings. So also, physical copies of the aforesaid notices were not communicated to the petitioner and consequently, he was not in a position to submit a reply to the same or contest the proceedings, which culminated in the impugned ex-parte order. It is submitted that the petitioner was not aware of the impugned proceedings till he received the notice dated 01.06.2024 under Section 79 of the CGST/KGST Act, 2017 directing the attachment of his bank accounts. Aggrieved by the said order, the petitioner has no option but to approach this Court NC: 2025:KHC:14085 by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit a reply to the show-cause notice and pre-intimation both dated 14.06.2023 and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause and submits that if one more opportunity is provided, by setting aside the impugned order, the petitioner would submit a reply to the show-cause notice and contest the proceedings.

6.

Per contra, learned HCGP for the respondents submits that since the pre-intimation notice and show-cause notice were duly communicated electronically to the petitioner by uploading the same on GST portal as well as e-mail, the petitioner cannot complain that he was not aware of impugned proceedings and as such, there is no merit in the petition and the same is liable to be dismissed.

7.

Though several contentions have been urged by both sides as regards to the petitioner not having received the pre- intimation notice and show-cause notice and his inability and omission to contest the proceedings, is a matter of record and an undisputed fact that the petitioner did not submit his reply to the NC: 2025:KHC:14085 show-cause notice or pre-intimation notice nor contested the proceedings, which culminated in the impugned ex-parte order.

8.

Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned order dated 05.10.2023 and remitting the matter back to the first respondent for reconsideration of the matter afresh in accordance with law to the stage of petitioner submitting reply to the impugned show-cause notice.

9.

In the result, I pass the following: ORDER

(i) The petition is hereby allowed.

(ii) The impugned order dated 05.10.2023 passed by the first respondent under Section 74(9) of the CGST/KGST Act, 2017 at Annexure-K is hereby set aside. NC: 2025:KHC:14085 (iii) The petitioner is directed to appear before the first respondent on 28.04.2025 without awaiting further notice from the first respondent.

(iv) The liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the first respondent who shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law.

(v) It is further made clear that in the event petitioners do not appear on 28.04.2025, the present order shall stand automatically recalled/cancelled and the present petition shall stand revived/ restored without further orders and without reference to the Bench. (S.R.KRISHNA KUMAR) JUDGE

MDS List No.: 1 Sl No.: 48

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.