BharatTaxGST

M/S Vijaya Trading Company vs. State Of Karnataka

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WP/19974/2024HC KarnatakaGSTCNR KAHC01041938202428 August 2024Bench: S.R.KRISHNA KUMAR7 pages
For Petitioner: SMT. HITHA M, ADVOCATE FOR SMT. LAKSHMI MENON., ADVOCATEFor Respondent: SRI. HEMA KUMAR K, AGA FOR R1 AND R2; SRI. ARAVIND V. CHAVAN, ADVOCATE FOR R3

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Cause title — parties, addresses and appearances
- 1 - NC: 2024:KHC:34478 WP No. 19974 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19974 OF 2024 (T-RES) BETWEEN: M/S VIJAYA TRADING COMPANY AT NO.87, B.H ROAD, PURUDAL ROAD, SHIVAMOGGA, KARNATAKA-577205. REP BY ITS PARTNER MR. RANGASWAMY CHETTIYAR BHASKAR …PETITIONER (BY SMT. HITHA M, ADVOCATE FOR SMT. LAKSHMI MENON., ADVOCATE) AND: 1. STATE OF KARNATAKA THROUGH THE PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU 560001. 2. OFFICE OF THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES(AUDIT) MALNAD DIVISION, SUVARNA KARNATAKA VANIJYA TERIGE BHAVAN, 'A' BLOCK, 12TH CROSS, GOPALAGOWDA EXTENSION, SHIVAMOGGA- 3. SUPERINDENT OF CENTRAL TAX (HPU) (PREVENTION AND INTELLIGENCE) Digitally signed by ANAND N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:34478 WP No. 19974 of 2024 OFFICE OF THE PRINCIPLE COMMISIONER OF GST COMMISSIONERATE MYSURU …RESPONDENTS (BY SRI. HEMA KUMAR K, AGA FOR R1 AND R2; SRI. ARAVIND V. CHAVAN, ADVOCATE FOR R3) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE SHOW CAUSE NOTICE DTD 16.12.2023 ISSUED IN FORM GST DRC-01 BEARING CASE ID NO. AD2912230167445/12/12/2023 ISSUED BY THE R-2 HEREIN MARKED AS ANNX-D; SET ASIDE THE IMPUGNED ORDER UNDER SEC 73(9) OF THE CGST AND KGST ACT 2017R/W 142 OF THE GST RULES DTD 15.04.2024 ISSUE BY THE R-2 HEREIN MARKED AS ANNX-H. 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 the following reliefs:

"a) Issue a writ of Certiorari setting aside the Show Cause Notice dated 16.12.2023 issued in FORM GST DRC-01, bearing Case Id No.AD2912230167445/12/12/2023, issued by the Respondent No. 2 herein. marked as Annexure - D; NC: 2024:KHC:34478 b) Issue a writ of Certiorari setting aside the impugned order under Sec 73(9) of the CGST and KGST Act, 2017 r/w 142 of the GST rules, dated 15.04.2024 bearing Case Id no. AD2912230167445/12- 12-2023, issued by Respondent no.2 herein marked as Annexure - H;

c) Issue a writ of Certiorari setting aside the summary of the order in Form GST DRC-07, bearing Ref no. ZD290424034473E, dated 15.04.2024 issued by Respondent no.2 herein marked as Annexure - H1;

d) Alternatively, in the event that the additions made under Annexures D, and H are not set aside in toto, the Petitioner respectfully prays for a writ of Mandamus, or an order or direction in the nature of Mandamus, directing Respondent No. 2 to adjudicate the matter afresh;

e) Issue writ of Mandamus to Respondent no.3 with the direction to provide the copies and the extract of the seized documents and other data stored on the • computer related to the petitioner company."

2.

Heard the learned counsels for the parties and perused the material on record.

3.

A perusal of the material on record will indicate that pursuant to the Audit Report dated 01.12.2023 issued by the NC: 2024:KHC:34478 respondent No.2 under Section 65(6) of the Karnataka Goods and Services Act, 2017 [for short, 'KGST Act, 2017'], the respondent No.2 issued an intimation under Section 73 dated 12.12.2023 to the petitioner. The petitioner did not submit a reply to the intimation, which was followed by a Show Cause Notice dated 16.12.2023 confirming the additions made in the Audit Report.

4.

The petitioner submitted replies dated 16.01.2024 and 23.01.2024 requesting the respondent No.2 for some more time to submit its reply along with relevant documents. In the meanwhile, on 01.03.2024, the respondent No.3-Superintendant of Central Tax (HPU) conducted seizure operation in the business premises of the sister entity of the petitioner and all the documents, books of accounts, registers, computer data, hard disk were seized by the respondent No.

3.

In this context, the learned counsel for the petitioner submits that its inability and omission to file a detailed response/reply along with relevant material to the Show Cause Notice was on account of the same having been seized by the respondent No.3 and the petitioner was not in a position to file a detailed response/reply to the same as a result of which, the respondent No.2 has proceeded to pass the impugned order, which NC: 2024:KHC:34478 is assailed in the present petition. It is also submitted by the learned counsel for the petitioner that in addition to allowing the petition, the respondent No.3 may be directed to furnish copies and extracts of the seized documents, data, computer etc., to the petitioner - Company.

5.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

6.

A perusal of the material on record will indicate that it is an undisputed fact that the respondent No.3 conducted search and seizure operations on 01.03.2024 during the course of which, material belonging to the petitioner viz., material found in the premises of sister entity of the petitioner viz., sales and purchase registers, books of accounts, detailed data were seized by the respondent No.3. 7. Under these circumstances, I am of the view that the explanation offered by the petitioner that on account of the said search and seizure operations conducted by the respondent No.3, the petitioner was not in a position to submit a detailed reply along NC: 2024:KHC:34478 with necessary material to the Show Cause Notice deserves to be accepted and the impugned orders at Annexure-H and H1 dated 15.04.2024 deserve to be set aside and the matter remitted back to the respondent No.2 for reconsideration to the stage of submitting reply to the Show Cause Notice and by issuing further direction to the respondent No.3. 8. In the result, the following: ORDER A. The petition is hereby allowed. B. The impugned orders at Annexure-H and H1 dated 15.04.2024 passed by the respondent No.2 are set aside. C. The matter is remitted back to the respondent No.2 for reconsideration afresh to the stage of the petitioner submitting reply to the Show Cause Notice at Annexure-D dated 16.12.2023. D. To enable the petitioner to submit a detailed reply along with necessary material to the aforesaid Show Cause Notice, the respondent No.3 is directed to provide copies and extracts NC: 2024:KHC:34478 of the sales and purchase registers, books of accounts etc., to the petitioner within a period of four [4] weeks from today. (S.R.KRISHNA KUMAR) JUDGE

RB

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.