M/S Rise Constructions vs. Additional Commissioner Of

WP/2665/2024HC KarnatakaGSTCNR KAHC01004361202413 August 2024Bench: S.R.KRISHNA KUMAR7 pages

For Petitioner: SRI. SANDEEP HUILGOL., ADVOCATEFor Respondent: SRI.AKASH B SHETTY, ADVOCATE FOR R1 TO R5; SRI.KUMAR M.N., ADVOCATE FOR R6

AI SummaryAllowed

Facts

The petitioner, M/s. Rise Constructions, a partnership firm, filed a writ petition before the High Court of Karnataka challenging an Order-in-Original (OIO) passed by the Additional Commissioner of Central Tax, Bengaluru South GST Commissionerate. The proceedings were initiated for the year 2016-17 via a Show Cause Notice dated 21.10.2021. The petitioner claims they did not receive the Show Cause Notice or subsequent notices for personal hearing, leading to an ex-parte order being passed by the respondent authority on 30.06.2023, issued on 05.07.2023. The petitioner contended that their failure to respond was due to bona fide reasons and unavoidable circumstances, and sought an opportunity to submit their reply and contest the proceedings.

Held

The Court held that in view of the petitioner's specific assertion that their inability to respond to the Show Cause Notice and contest the proceedings was due to bona fide reasons, unavoidable circumstances, and sufficient cause, it was just and appropriate to provide one more opportunity. Consequently, the impugned ex-parte order was set aside. The matter was remitted back to Respondent No. 3 (Superintendent of Central Tax) for reconsideration. The petitioner was granted liberty to submit their response and documents, which would be considered by Respondent No. 3. The respondent authority was directed to provide a personal hearing to the petitioner and proceed in accordance with the law. The Court explicitly kept open all rival contentions of the parties on all aspects, including jurisdiction and limitation, and expressed no opinion on these matters. The respondents were also directed to furnish a copy of the Show Cause Notice to the petitioner within two weeks.

Key Issues

1. Whether the petitioner's failure to respond to the Show Cause Notice and attend personal hearings was due to bona fide reasons, unavoidable circumstances, and sufficient cause, thereby warranting a fresh opportunity to contest the proceedings? Petitioner's Argument: The petitioner argued that they did not receive the Show Cause Notice and personal hearing notices, and their non-response was due to genuine reasons. They sought to set aside the ex-parte order and be granted another chance to submit their reply and present their case with supporting documents. Revenue's Argument: The respondents contended that the petition lacked merit and should be dismissed. They highlighted that the impugned order was passed ex-parte because the petitioner failed to submit a reply to the Show Cause Notice and did not appear for personal hearings.

Sections Cited

Chapter V of the Finance Act, 1994

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

- 1 - NC: 2024:KHC:32940 WP No. 2665 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 2665 OF 2024 (T-RES) BETWEEN: M/S. RISE CONSTRUCTIONS, A PARTNERSHIP FIRM REPRESENTED HEREIN BY ITS PARTNER, MR. SINGAMSETTY RAM MOHAN, SON OF NARASIMHAM, AGED 53 YEARS, HAVING ADDRESS AT NO.1/1/295, VENKATACHALAM STREET, NAZEERTHOTA NAWABPET, NELLORE, ANDHRA PRADESH – 524 002. FORMERLY AT NO.114/2, NAGESHWARA RAO BUILDING, NAIDU FARM, OPP. TO BIOCON, ELECTRONIC CITY POST, BANGALORE – 560 100. (A FIRM –UNREGISTERED UNDER INDIAN PARTNERSHIP ACT, 1932). …PETITIONER (BY SRI. SANDEEP HUILGOL., ADVOCATE) AND: 1. ADDITIONAL COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH GST COMMISSIONERATE, C.R. BUILDING, P.B. NO.5400, Digitally signed by Vandana S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:32940 WP No. 2665 of 2024 QUEENS ROAD, BENGALURU – 560 001. 2. ASSISTANT COMMISSIONER OF CENTRAL TAX, DIVISION-SD-8, BENGALURU SOUTH GST COMMISSIONERATE, C R BUILDING, P B NO.5400, QUEEN'S ROAD, BENGALURU – 560 001. 3. SUPERINTENDENT OF CENTRAL TAX, RANGE D, SOUTH DIVISION - 8, BENGALURU SOUTH COMMISSIONERATE, KENDRIYA SADAN, 7TH FLOOR, A WING, KORAMANGALA 3RD BLOCK, BANGALORE – 560 003. 4. JOINT COMMISSIONER OF CENTRAL TAX, CENTRAL EXCISE AND SERVICE TAX, GST COMMISSIONERATE, BENGALURU SOUTH, C.R. BUILDING, P.B. NO.5400, QUEEN'S ROAD, BENGALURU – 560 001. 5. CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY HEREIN BY ITS CHAIRMAN, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI – 110 001. 6. THE UNION OF INDIA, REPRESENTED HEREIN BY THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, - 3 - NC: 2024:KHC:32940 WP No. 2665 of 2024 GOVERNMENT OF INDIA, NEW DELHI – 110 001. …RESPONDENTS (BY SRI.AKASH B SHETTY, ADVOCATE FOR R1 TO R5; SRI.KUMAR M.N., ADVOCATE FOR R6) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO i) QUASH THE IMPUGNED ORDER-IN-ORIGINAL BEARING FILE NO. GEXCOM/ADJN/ST/JC/1467/2021, OIO NO. BLR- SOUTH/ADC/31/2023-24 AND DIN NO. 20230757YV090000F199 WHICH WAS PASSED ON 30/06/2023 AND ISSUED ON 05/07/2023 BY THE R1 UNDER CHAPTER V OF THE FINANCE ACT, 1994 (ANNEXURE-A) AND ETC., 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; "(i) Quashing the impugned Order-in-Original bearing File No.GEXCOM/ADJN/ST/JC/1467/2021, OIO No.BLR-SOUTH/ADC/31/2023-24 and DIN No.20230757YV090000F199 which was passed on 30.06.2023 and issued on 05.07.2023 by the 1st Respondent under Chapter V of the Finance Act, 1994 (Annexure-A); NC: 2024:KHC:32940 (ii) Pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity."

A perusal of the material on record will indicate that the respondents initiated aforesaid proceedings for the year 2016-17 by issuance of the Show Cause Notice dated 21.10.2021, which was followed by Notices for personal hearing issued by the respondents to the petitioner. However, since the petitioner did not reply to the aforesaid Show Cause Notices, nor participated in the proceedings, the respondents proceeded to pass the impugned ex-parte order, which is assailed in the present petition.

Heard learned counsel for the petitioner and learned counsel for the respondents.

Learned counsel for the petitioner submits that the aforesaid Show Cause Notice and the Notices for personal hearing issued by the respondents were not received by the petitioner and he was not aware of the same and consequently, his inability and omission to issue reply/response to the Show Cause Notice and to contest the proceedings was due to NC: 2024:KHC:32940 bona-fide reasons, unavoidable circumstances and sufficient cause. It is submitted that if the impugned order is set aside and one more opportunity is provided to the petitioner, he would submit his reply to the Show Cause Notice and contest the proceedings by producing relevant documents, pleadings, etc., and the respondents may be directed to proceed further in the matter.

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

A perusal of the impugned order will indicate that at paragraph No.16 the respondents have come to the conclusion that the petitioner has not submitted his response/reply to the Show Cause Notice, nor appeared when notices for personal hearing were issued by the respondents to the petitioner, which culminated in the impugned ex-parte order being passed by the respondents.

Under these circumstances, in view of the specific assertion on the part of the petitioner that his inability and omission to submit reply/response to the Show Cause Notice NC: 2024:KHC:32940 and contest the proceedings was due to bona-fide reasons, unavoidable circumstances and sufficient cause, in order to provide one more opportunity to the petitioner, I deem it just and appropriate to set aside the impugned order and remit the matter back to respondent No.3 for reconsideration afresh from the stage of submitting reply to the Show Cause Notice and to proceed further in accordance with law.

In the result, petition is hereby allowed. The impugned order is hereby set aside. Mater is remitted back to respondent No.3 for reconsideration afresh in accordance with law from the stage of petitioner submitting reply to the Show Cause Notice dated 21.10.2021. 9. Liberty is reserved in favour of the petitioner to submit his response/reply along with documents, which shall be considered by respondent No.3, who shall provide an opportunity of personal hearing to the petitioner and proceed further in accordance with law.

10.

All rival contentions of the parties on all the aspects of the matter including juri iction, limitation, etc., are kept open and no opinion is expressed on the same. NC: 2024:KHC:32940

11.

Respondents are directed to furnish a copy of the Show Cause Notice to the petitioner at the address shown in the cause title within a period of two weeks from today. (S.R.KRISHNA KUMAR) JUDGE

PN CT: SN List No.: 1 Sl No.: 9

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.