Mr Gangaiah vs. State Of Karnataka

2024 issued in form GST APL-02 by the Joint Commissioner of Commercial Taxes (Appeals)-5, Bangalore (Annexure- B) and the letter dated 19.08.2024 along with the notice to a third person under Section 79(1)(c) dated 12.08.2024 issued in FORM GST DRC-13 by the 3rd Respondent (Annexure- C);

Heard learned counsel for the petitioner, learned AGA for respondent Nos.1 to 3 and learned counsel for respondent No.4 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 the material on record will indicate that on 20.09.2023, respondent Nos.1 to 3 are said to have issued intimation under Section 73(5) of the CGST/KGST Act, 2017 (for short “the said Act of 2017”) to the petitioner. Since the petitioner did not submit any reply to the same, show-cause notice under Section 73(1) of the said Act of 2017 dated 30.09.2023 was issued by respondent No.3 demanding Rs.10,86,840/- together with applicable interest and penalty. Further, since the petitioner did not respond to the said show-cause notice also, respondent No.3 proceeded to pass the impugned exparte order dated 18.012.2023 confirming the GST demand and also imposing interest and penalty, pursuant to which respondent No.3 issued an endorsement as per Annexure-F dated 22.07.2024. It is the specific contention of the petitioner that he was not aware of the aforesaid proceedings and the impugned exparte order and immediately coming to know about the same he preferred an NC: 2024:KHC:36647 appeal which was dismissed as barred by limitation, pursuant to which respondent No.3 had issued notice to respondent No.4-Bank directing freezing of the bank account of the petitioner. Under these circumstances, the petitioner is before this Court by way of the present petition.

Per contra, learned AGA for respondent Nos.1 to 3 and learned counsel for respondent No.4 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, in particular, the impugned order will indicate that it is an undisputed fact that the petitioner has neither replied to the intimation under Section 73(5) of the said Act of 2017 nor to the show-cause notice issued under section 73(1) of the said Act of 2017 and consequently, the concerned respondents continued with the impugned proceedings and passed the impugned order at Annexure-A which is an exparte order. Under these circumstances, in order to give an opportunity to the petitioner to submit his reply to the show-cause notice and contest the case on merits, I deem it just and appropriate to set aside the impugned order, consequential notice and acknowledgement and remit the matter back to respondent No.3 NC: 2024:KHC:36647 for reconsideration afresh in accordance with law to the stage of petitioner submitting reply to the show-cause notice.

Insofar as the dismissal of the appeal filed by the petitioner on the ground of delay is concerned, since the appeal filed by the petitioner was dismissed as barred by limitation, there would not be any merger of the adjudication order with the order of the appellate authority and consequently, the dismissal of appeal as barred by time/limitation would not come in the way of this Court exercising its juri iction under Articles 226 and 227 of the Constitution of India by setting aside the exparte order and remitting the matter back to respondent No.3 for reconsideration afresh, in accordance with law.

In the result, I pass the following: ORDER i. The Writ Petition is allowed. ii. The impugned order along with summary of the order dated 18.12.2022 and 30.12.2023 at Annexure-A, the impugned acknowledgement dated 31.07.2024 at Annexure-B and the impugned letter dated 19.08.2024 at Annexure-C are hereby quashed. NC: 2024:KHC:36647 iii. The matter is remitted back to respondent No.3 for reconsideration afresh to the stage of petitioner submitting his reply to the show-cause notice dated 30.09.2023. iv. Liberty is reserved in favour of the petitioner to file reply, documents etc., to the show-cause notice, which shall be considered by respondent No.3, who shall provide sufficient and reasonable opportunity to the petitioner and pass appropriate orders in accordance with law. v. It is made clear that any amount recovered by respondent Nos.1 to 3 from the account of the petitioner in respondent No.4-Bank pursuant to the impugned order would be subject to the final outcome of the proceedings. (S.R.KRISHNA KUMAR) JUDGE