M/S Schneider Electric Private Limited vs. State Of Karnataka

Facts

The petitioner, M/s Schneider Electric Private Limited, filed a writ petition before the Karnataka High Court challenging a Show Cause Notice dated June 30, 2023, issued by the Assistant Commissioner of Commercial Taxes (Respondent No. 3). The petitioner also sought a direction to sanction a refund of tax paid on inputs related to export of services for the period April 2021-March 2022, amounting to Rs. 4,36,24,616/-. The respondents, represented by the High Court Government Pleader, submitted that the impugned Show Cause Notice had been withdrawn and a fresh/revised notice was issued on August 1, 2023. In this revised notice, the demand in respect of GST had been eschewed. The respondents further stated that the petitioner could file a reply to the revised notice, and no precipitative action would be taken until a decision was reached.

Held

The Court noted the submission by the learned HCGP for the respondents that the impugned Show Cause Notice dated June 30, 2023, had been withdrawn and a revised notice was issued on August 1, 2023, in which the demand in respect of GST had been eschewed. The Court found this stand appreciable. Consequently, the Court disposed of the writ petition, confining the matter to the specifications in the Revised Notice, as the impugned notice had become insignificant. All contentions in connection with the matter were kept open. The Court granted four weeks' time for the Petitioner to file a reply to the Revised Notice and a further period of four weeks for the Respondent to take a call on the said reply. Costs were made easy.

Key Issues

1. Whether the Show Cause Notice dated June 30, 2023, issued by Respondent No. 3, is liable to be quashed under Article 226 of the Constitution of India? 2. Whether Respondent No. 3 should be directed to sanction the refund of tax paid on inputs relating to export of services for the period April 2021-March 2022, amounting to Rs. 4,36,24,616/-, under Article 226 of the Constitution of India? Petitioner's contention: The petitioner sought to quash the Show Cause Notice and compel the sanction of the refund. Revenue's contention: The Revenue submitted that the impugned Show Cause Notice had been withdrawn and a revised notice issued on August 1, 2023, wherein the GST demand was eschewed. They further stated that the petitioner could file a reply to the revised notice, and no precipitative action would be taken pending a decision.