M/S L And T Realty Developers Limited vs. The Assistant Commissioner
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The petitioner, M/s L & T Realty Developers Limited, filed a writ petition before the Karnataka High Court challenging a deficiency memo dated November 11, 2024, issued by the Assistant Commissioner of Commercial Taxes (Respondent No. 1). This memo rejected the petitioner's refund claim of Rs. 7,42,78,466/- for the period of September 2022. The petitioner had filed multiple refund claims, starting from November 4, 2022, each time receiving a deficiency memo from Respondent No. 1. The latest deficiency memo, dated November 11, 2024, is the subject of the current petition. The petitioner sought to quash this memo and direct the respondents to refund the claimed amount.
Held
The Court disposed of the petition by directing Respondent Nos. 1 and 2 to consider the refund claim of the petitioner. The consideration was to be done in accordance with the law, taking into account the circulars CBIC Circular No. 125/44/2019-GST dated 18.11.2019 and CBIC Instruction No. 1/2022-23 (GST-Investigation) dated 25.05.2022, as well as the judgments cited by the petitioner. Crucially, the Court directed that the refund claim be considered on merits without insisting on the petitioner curing/rectifying the deficiencies or raising any further disputes. This direction was to be complied with within a period of eight weeks from the date of receipt of a copy of the order. The Court did not explicitly address the contention regarding the amount being collected without the authority of law under Article 265, but the overall direction to consider the refund claim on merits implies a review of the entire situation.
Key Issues
1. Whether the deficiency memo dated 11.11.2024, issued by Respondent No. 1, rejecting the petitioner's refund claim of Rs. 7,42,78,466/- for September 2022, is liable to be quashed? Petitioner's arguments: The petitioner contended that Respondent No. 1 had repeatedly issued deficiency memos in response to their refund claims. They argued that the refund claim should be considered bearing in mind specific circulars, namely CBIC Circular No. 125/44/2019-GST dated 18.11.2019 and CBIC Instruction No. 1/2022-23 (GST-Investigation) dated 25.05.2022. They also relied on several High Court judgments, including Union of India Vs. M/s. Bundl Technologies Private Limited, The Intelligence Officer, DGGI Vs. Kesar Color Chem Industries, and Suretex Prophylactics (India) Private Limited vs. Union of India. The petitioner further sought a direction to refund the amount collected without due process of law, citing Article 265 of the Constitution. Revenue's arguments: The learned AGA for the respondents submitted that if reasonable time is granted, Respondent No. 1 would consider the petitioner's claim and pass appropriate orders in accordance with the law.
Sections Cited
Section 265
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs: “a) issue a writ in the nature of Certiorari or any other appropriate writ or order or direction under Article 226 of the Constitution quashing the impugned deficiency memo bearing number ZD291124032076N dated 11.11.2024 passed by Respondent No.1 at Annexure-A, rejecting refund claim of Rs.7,42,78,466/- for the period September 2022;
b) issue a writ in the nature of Mandamus or any other appropriate writ or order or direction under Article 226 of the Constitution directing the Respondents to forthwith refund the amount of Rs.7,42,78,466/-collected from the Petitioner without following due process of law contained under the KGST Act, along with applicable interest;
c) issue a writ in the nature of Mandamus or any other appropriate writ or order or direction under Article 226 of the Constitution directing the Respondent No.1 not to issue further deficiency memo in respect of the refund of Rs.7,42,78,466/- for the period September 2022; NC: 2025:KHC:13406 d) Hold that the amount of Rs.7,42,78,466/ recovered from the Petitioner during investigation prior to issuance of show cause notice, is collected without the authority of law in terms of Article 265 of the Constitution;
e) pass such further order(s) and other reliefs as the nature and circumstances of the case may require.”
Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that on 04.11.2022 the petitioner filed refund claim, in response to which respondent No.1 issued deficiency memo pursuant to which the petitioner filed second refund claim, to which also respondent No.1 issued identical deficiency memo on 24.01.2023. Subsequently, the petitioner filed a third refund claim on 13.02.2023, to which also respondent No.1 issued identical deficiency memo on 27.02.2023. Thereafter, the petitioner filed fourth refund claim along with clarification on 18.09.2024, to which respondent No.1 yet again issued the impugned deficiency memo at Annexure-A dated 11.11.2024, which is assailed in the present petition. Learned counsel for the petitioner submits that necessary directions may be issued to NC: 2025:KHC:13406 respondent No.1 to consider refund claim bearing in mind the circulars viz., CBIC Circular No.125/44/2019-GST dated 18.11.2019 and CBIC Instruction No.1/2022-23 (GST-Investigation) dated 25.05.2022 and also the following judgments: i. The Union of India Vs. M/s. Bundl Technologies Private Limited – 2022 (3) TMI 625 (Kar) Industries – 2025 (2) TMI 175 (Kar)
iii. Suretex Prophylactics (India) Private Limited vs. Union of India – (2023) 8 Centax 19 (Kar)
Per contra, learned AGA submits that if reasonable time is granted, respondent No.1 would consider the claim of the petitioner and take appropriate decision/pass appropriate orders, in accordance with law.
In view of the aforesaid facts and circumstances, the petition stands disposed of by directing respondent Nos.1 and 2 to consider the refund claim of the petitioner, in accordance with law bearing in mind the circulars viz., CBIC Circular No.125/44/2019- GST dated 18.11.2019 and CBIC Instruction No.1/2022-23 (GST- Investigation) dated 25.05.2022 and judgments in the cases of the Union of India Vs. M/s. Bundl Technologies Private Limited – NC: 2025:KHC:13406 2022 (3) TMI 625 (Kar), The Intelligence Officer, DGGI Vs. Kesar Color Chem Industries – 2025 (2) TMI 175 (Kar) and Suretex Prophylactics (India) Private Limited vs. Union of India – (2023) 8 Centax 19 (Kar), on merits and without insisting upon curing/rectifying the deficiencies and also without raising any dispute, within a period of eight weeks from the date of receipt of a copy of this order.
Subject to the aforesaid observations and directions, the petition stands disposed of. (S.R.KRISHNA KUMAR) JUDGE
BMC List No.: 1 Sl No.: 29
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.