Atc Commercial vs. The Deputy Commissioner Of Commercial Taxes (Audit)
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The petitioner, ATC Commercial, represented by its proprietor Shri Syed Apsar Ali, filed a writ petition before the Karnataka High Court. The petitioner sought to quash an order dated 21.03.2024 passed by the Deputy Commissioner of Commercial Taxes (Audit), DGSTO-6, Tumkur. The petitioner contended that it was unaware of the GST proceedings as the Show Cause Notice in Form GST-DRC-01A dated 03.10.2023 was not communicated or served upon it. Consequently, the petitioner could not submit a reply or contest the proceedings, which led to an ex-parte order. The petitioner only became aware of the proceedings when its bank accounts were directed to be attached. The respondent argued that the notice was issued to the petitioner's last known address and that the petition lacked merit.
Held
The Court allowed the petition and set aside the impugned order dated 21.03.2024. The Court found that the respondent had passed the order as a result of ex-parte proceedings because the petitioner did not contest or submit a reply to the show cause notice. This failure was attributed to the notice being served at the petitioner's previous address from which it had vacated. The Court adopted a justice-oriented approach, acknowledging the petitioner's assertion of bonafide reasons, unavoidable circumstances, and sufficient cause for its inadvertence and omission to appear. The matter was remitted back to the respondent for fresh consideration. The petitioner was directed to appear before the respondent on 21.04.2025, file objections and documents, and the respondent was directed to proceed from that stage after providing a reasonable opportunity. It was clarified that if the petitioner failed to appear and file objections on the specified date, the order would stand revoked.
Key Issues
1. Whether the impugned order dated 21.03.2024, passed ex-parte by the respondent, is liable to be quashed on the grounds of non-service of the Show Cause Notice and lack of opportunity to the petitioner to contest the proceedings? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's contention: The petitioner argued that the Show Cause Notice was not served, and therefore, it was unaware of the proceedings, leading to an ex-parte order. This inability to participate was due to bonafide reasons, unavoidable circumstances, and sufficient cause. The petitioner sought an opportunity to submit a reply and contest the proceedings. Respondent's contention: The respondent contended that the notice was issued to the petitioner's last known address and that the petition was without merit.
Sections Cited
GST-DRC-01A
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, petitioner seeks the following reliefs: “i) Issue a writ in the nature of certiorari or any other writ / to quash the impugned order bearing No.Audit TMK/ / 2023- 24 dated 21.03.2024 (Annexure – A) passed by the respondent. ii) Grant such other order or direction as deemed fit in the facts and circumstances of the case in the interest of justice.”
Heard learned counsel for the petitioner and learned HCGP for the respondent and perused the material on record.
Learned counsel for the petitioner submits that the Show Cause Notice in Form GST-DRC-01A dated 03.10.2023 were not communicated or served upon the petitioner and it was not aware of the said proceedings. So also, physical copies of the aforesaid notices were not communicated to the petitioner and consequently, it 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 it received a notice from the banker of the petitioner stating that the respondent had directed the bank to attach the petitioner’s bank accounts. The learned counsel for the petitioner further submitted that the inability and omission on the part of the petitioner to submit reply to the Show Cause Notice and contest the proceedings was due to bonafide reasons, unavoidable NC: 2025:KHC:11847 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.
Per contra, learned AGA for the respondent submits that the notice of the impugned proceedings was issued to the last known address of the petitioner and submits that there is no merit in the petition and that the same is liable to be dismissed.
A perusal of the material on record discloses that the respondent has passed the impugned order as a result of the ex-parte proceedings in which the petitioner did not contest and not submitted his reply to the show cause notice nor participated in the proceedings on account of the notice being served to the previous address of the petitioner from where the petitioner has now vacated the said premises. Under these circumstances, in the light of the specific assertion on the part of the petitioner that the inadvertence and omission to appear before the respondent and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause, it is just and appropriate to adopt a justice oriented approach and set aside the impugned order and remit the matter back to the respondent for NC: 2025:KHC:11847 reconsideration afresh in accordance with law by issuing certain directions.
The result, I pass the following: ORDER
(i) The petition is hereby allowed.
(ii) The impugned order at Annexure – A dated 21.03.2024 is hereby set aside.
(iii) Matter is remitted back to the respondent for reconsideration afresh, in accordance with law.
(iv) Petitioner is directed to appear before the respondent on 21.04.2025 without awaiting further notice from the respondent.
(v) Petitioner is directed to file the objections, documents, etc., to the Show Cause Notice and the respondent is directed to proceed further from that stage and dispose of the proceedings after providing sufficient and reasonable opportunity to the petitioner, in accordance with law.
(vi) It is made clear that if petitioner does not appear on 21.04.2025 and does not file objections along with the document on that day, the present NC: 2025:KHC:11847 order shall stand automatically revoked without reference to the Bench. (S.R.KRISHNA KUMAR) JUDGE
SV List No.: 1 Sl No.: 124
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.