M/S Zik Metals vs. The Joint Commissioner (In-Situ) - Karnataka High Court, 09 August 2023

Cause title — parties, addresses and appearances

- 1 - NC: 2023:KHC:28084 WP No. 15433 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF AUGUST, 2023 BEFORE THE HON'BLE MR JUSTICE KRISHNA S DIXIT WRIT PETITION NO.15433 OF 2023 (T-RES) BETWEEN: M/S. ZIK METALS, PROPRIETORSHIP CONCERN, REP. BY ITS PROPRIETOR, MR. IRFAN KHAN, AGED ABOUT 21 YEARS, SEETHANAYANAYAKANAHALLI VILLAGE, H. HOSAKOTE POST, MALUR TALUK, KOLAR DISTRICT, KARNATAKA - 563 130. …PETITIONER (BY SRI. SHANKARE GOWDA M.N., ADVOCATE) AND: THE JOINT COMMISSIONER (IN-SITU) OFFICE OF THE PRINCIPAL COMMISSIONER OF CENTRAL TAX, GST COMMISSIONERATE, BENGALURU EAST TRAFFIC AND TRANSIT MANAGEMENT CENTRE, BMTC BUS STAND, HAL AIRPORT ROAD, DOMMALURU, BENGALURU - 560 071. …RESPONDENT (BY SRI. JEEVAN J NEERALGI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE BEARING NO.GEXCOM/AE/VRFN/ITCB/17/2020-CGST-RANGE-B-DIV-9, ALONG WITH FORM GST DRC-01 IN DIN.20230557000000001E07/1083/23 BOTH DATED 23.5.2023 Digitally signed by SHARADA VANI B Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:28084 WP No. 15433 of 2023 ISSUED BY THE RESPONDENT UNDER SECTION 74 (1) OF THE ACTS (ANNEXURE-C AND D) AND ETC. THIS PETITION COMING ON FOR PRILIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The subject matter of this writ petition is substantially similar to the one in W.P.Nos.1607,1609 & 1613 of 2022 & connected cases between M/s. V.R.S. Traders v/s Assistant Commissioner (State Taxes) decided by the Hon'ble High Court of Judicature at Madras vide judgment dated 10.02.2022 granting relief of quashment and remand, to the litigant. The penultimate paragraph of the judgment reads as under: "Therefore, this Court has no hesitation to hold that the impugned order cannot stand in the legal scrutiny and in that view of the matter, these writ petitions are disposed of with the following orders:

"The respective impugned orders in these writ petitions are hereby quashed. All these three matters are remitted back to the respondent for re-consideration. While re-considering the same, they shall commence the proceedings from where, it has already been stopped i.e., till DRC- 01A notice, which means, they should issue DRC-01 notice to the petitioner and thereafter after giving a fair opportunity NC: 2023:KHC:28084 of being heard to the petitioner, necessary orders shall be passed with regard to the assessment, if any."

The vehement submission of learned counsel for the Revenue that the judgment of other High Courts have only persuasive value and therefore, they need not be followed is difficult to countenance in the light of the decision of Apex Court in KUSUM INGOTS & ALLOYS word 'shall' having been replaced by the word 'may' under Section 74(5) read with extant Rule 142(1A), now discretion lies with the Authorities to issue notice/intimation or not, and therefore, non-sending of NC: 2023:KHC:28084 such notice/intimation should pale into insignificance, is difficult to countenance. The word ‘may’ ordinarily can be construed to imply some amount of discretion, is true; however that is not the discretion of a Mughal Emperor; Lord Halsbury says that ‘discretion’ means according to the rules of reason and justice; that being the position, the impugned action does not reflect the elements of justice nor reason.

In view of the above, the petition is disposed off granting same relief as has been accorded by the Hon'ble Madras High Court to the assessees in the cognate petitions. Impugned orders having been quashed, matter is remitted for consideration afresh, keeping open all contentions.

Costs made easy. JUDGE

ABK List No.: 1 Sl No.: 14 CT:SNN