M/S Shah Associates vs. The Assistant Commissioner Of Commercial Taxes
Held
The Court held that while the respondents had provided an intimation of personal hearing, the petitioner must be given an opportunity to demonstrate the genuineness of its transactions. The Court also clarified that extending this opportunity does not automatically unblock the ITC.
Facts
The petitioner's Input Tax Credit (ITC) was blocked by the Assistant Commissioner of Commercial Taxes under Rule 86A of the CGST/KGST Rules, 2017. The blocking was based on the premise that the petitioner was claiming ITC from fictitious entities.
Key Issues
Whether the petitioner was denied a reasonable opportunity to show cause against the blocking of its Input Tax Credit. Whether the petitioner can demonstrate the genuineness of its transactions with the alleged fictitious entity.
Sections Cited
Rule 86A
AI-generated summary — verify with the full judgment below
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HC-KAR
CNR: KAHC010304852026 NC: 2026:KHC:49956 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 13978 OF 2026 (T-RES)
BETWEEN:
M/S SHAH ASSOCIATES REPRESENTED BY ITS PROPRIETOR MR. MOHMMED SHABBIR AHAMED HAVING ITS PRINCIPAL PLACE OF BUSINESS AT NO.128/4, GROUND FLOOR, BUDHAL ROAD, NEAR TAJ PALACE, BN LAYOUT, DAVANAGERE, KARNATAKA, 577001. …PETITIONER (BY SRI. GOWRI SHANKER M.,ADVOCATE) AND:
THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO-460, DEVARAJ URS LAYOUT, DAVANAGERE - 577006. 2. THE COMMERCIAL TAX OFFICER (VIGILANCE-37) NO. 305, 3RD FLOOR, A-BLOCK, VANIJYA THERIGE KARYALAYA-2, KORAMANGALA, BENGALURU 560047. VANAMALA N Location: HIGH COURT OF KARNATAKA HC-KAR
CNR: KAHC010304852026 NC: 2026:KHC:49956
THE JOINT COMMISSIONER OF COMMERCIAL TAXES (ADMIN) DGSTO, DAVANGERE DIVISION, C.R. BUILDING 'C' BLOCK, DEVA
The judgment continues below.
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