M/S Sri Om Traders vs. Union Of INDIA - Karnataka High Court, 28 October 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC:43171 WP No. 30178 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 30178 OF 2024 (T-RES) BETWEEN: M/S SRI OM TRADERS AN UNREGISTERED PROPRIETORSHIP FIRM OPP. SRINIDHI AUTO WORKS, 1ST CROSS, GSK M ROAD, PANCHAVATI COLONY, SHIVAMOGGA – 577 202. REPRESENTED BY ITS PROPRIETOR SIR H.P LAXMANA …PETITIONER (BY SMT. NEHA ALUR, FOR SRI. ATUL KRISHNA RAO ALUR, ADVOCATES) AND: 1. UNION OF INDIA THROUGH ITS SECRETARY, REVENUE MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI - 110 001. 2. STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY, DEPARTMENT OF FINANCE. GOVERNMENT OF KARNATAKA, AMBEDKARVEEDHI, BENGALURU - 560 001. 3. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AUDIT 4, SUVARNA KARNATAKA VANIJYA THERIGE BHAVANA, GOPALA GOWDA EXTENSION, SHIMOGGA 577 205. …RESPONDENTS (BY SRI. JEEVAN.J. NEERALGI, ADVOCATE FOR R-1 SMT. JYOTI.M.MARADI, HCGP FOR R-2 & R-3) Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:43171 WP No. 30178 of 2024 THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 31.07.2024 PASSED BY THE R-3 AT ANNEXURE-H BEARING NO ACCT/AUDIT 4 SMG 236/2024-25 FOR THE YEAR 2020-21 IS WITHOUT AUTHORITY OF LAW, IN SO FOR AS THE PETITIONER IS CONCERNED. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks for the following reliefs:-

“ A) issue a writ of certiorari or any other appropriate writ or order to quash the order dated 31.07.2024 passed by the Respondent-3 at ANNEXURE H, bearing No ACCT/Audit 4:Smg:236/2024-25 for the year 2020-21, is without authority of law, in so for as the petitioner is concerned.

B) issue a writ of certiorari or any other appropriate writ or order to quash the demand in DRC 07, dated 31/07/2024 issued by the Respondent-3 for the assessment year 2020-21, bearing Ref no. ZD290724108100S at ANNEXURE J in so for as the petitioner is concerned.

C) issue a writ of declaration or Writ in the nature of declaration, declaring that, there is no provision under the KGST/CGST Act, to levy the tax on the physical stock, in so for as the petitioner is concerned.

And Grant such other reliefs as this Hon'ble High Court may think including the cost of this writ petition.”

Heard the learned counsel for the petitioner and the learned counsel for respondent No.1 as well as learned HCGP for respondent No.3 and perused the material on record. HC-KAR NC: 2025:KHC:43171

A perusal of the material on record will indicate that the petitioner filed its Return of Turnovers for tax periods 2020-21. The Respondent initiated proceedings under Section 74 of the KGST Act, 2017 and issued intimation notice dated 15.09.2023 to the Petitioner to file reply. Subsequently, the 3rd respondent issued show-cause notice dated 27.09.2023 under Section 73 of the KGST Act calling for explanation with regard to certain discrepancies. The Petitioner filed its reply dated 18.07.2024 to the aforesaid show-cause notice. Thereafter, the 3rd respondent again issued show cause notice dated 31.07.2024 under Section 122(2)(b) of the KGST Act, proposing to levy penalty and without considering the reply filed by the Petitioner on 18.07.2024 and not providing sufficient opportunity of personal hearing to the petitioner under Section 75(4) of the Act proceeded to pass the impugned adjudication order at Annexure-H dated 31.07.2024, which is assailed in the present petition.

Learned counsel for the petitioner submits that the Petitioner had filed its reply dated 18.07.2024 to the show-cause notice dated 27.09.2023 and the 3rd respondent without considering the said reply and without granting an opportunity of HC-KAR NC: 2025:KHC:43171 personal hearing passed the impugned order at Annexure-H dated 31.07.2024, which deserves to be quashed and the matter be remitted back to the 3rd respondent for reconsideration afresh in accordance with law by providing an opportunity to the petitioner to submit a reply to the show cause notice / produce necessary documents and thereafter to pass appropriate orders.

Per contra, learned HCGP for respondents 1 and 2 as well as learned counsel for 1st respondent would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed.

A perusal of the material on record including the impugned order will indicate that it is an undisputed fact that the petitioner filed its reply to the show-cause notice and without considering the same, the 3rd respondent proceeded to pass the impugned order without granting an opportunity of personal hearing to the petitioner and also to produce necessary documents. Under these circumstances, by adopting a justice oriented approach and 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 HC-KAR NC: 2025:KHC:43171 matter back to the 3rd respondent for reconsideration afresh in accordance with law by issuing certain directions.

In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure-H dated 31.07.2024 passed by the 3rd respondent is hereby set aside; (iii) The petitioner shall appear before the 3rd respondent on 25.11.2025, on which date, he shall submit his reply to the show cause notice along with relevant documents. (iv) Upon the petitioner submitting a reply along with relevant documents to the show cause notice on 25.11.2025, the 3rd respondent shall afford a reasonable opportunity to the petitioner and hear him and proceed further in accordance with law. (v) In the event, the Petitioner does not appear before the 3rd respondent on 25.11.2025 as stated supra, the present order shall stand automatically recalled without further orders. (S.R.KRISHNA KUMAR) JUDGE

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