M/S Madhu Plastics Private Limited vs. The State Of Karnataka
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Cause title — parties, addresses and appearances
ORAL ORDER In this petition, the petitioner sought for following relief: "(i) Issue a Writ of Certiorari or writ in the nature of certiorari to quash the adjudication order No.ACCT/LGSTO-27/2A vs 3B/2023-24 dated 12.03.2024 along with the summary of order passed under Section 73 of the KGST Act by the second respondent for the financial year 2018-19 vide ANNEXURE-F and consequently quash the Endorsement bearing T.No.03/End/2024-25 dated 29.01.2025 issued by the third Respondent rejecting the application for rectification vide ANNEXURE-K; (ii) Issue a writ of Mandamus or a direction in the nature of mandamus directing the third respondent to afford reasonable opportunity to petitioner to file reply to the show cause notice bearing reference No.ACCT/LGSTO- 27/M2/2A vs 3B/2018-19 dated 08.12.2024 vide ANNEXURE-E and consider the same in accordance with law; NC: 2025:KHC:10296 (iii) Issue a writ of Mandamus or a direction in the nature of mandamus directing the third respondent to remove the attachment of the input tax credit ledger of petitioner as seen from ANNEXURE-G; and (iv) To pass such other orders or directions as deemed fit by this Hon'ble Court in the interest of justice and equity."
Heard learned counsel for the petitioner and learned Additional Government Advocate for the respondents and perused the material on record.
A perusal of the material on record will indicate that the respondent No.3 had issued Intimation dated 28.11.2023 (Annexure-D) to the petitioner-company under Section 73(5) of the Central Goods and Services Tax Act (for short, hereinafter referred to as 'CGST Act') to the petitioner, who did not submit any reply to the same. Subsequently, the respondent No.3 issued Show Cause Notice dated 08.12.2023 (Annexure-E) under Section 73(1) of the CGST Act, to which also the petitioner-company did not submit any reply. Thereafter, the respondent No.3 proceeded to pass the impugned order dated 12.03.2024 (Annexure-F) under Section 73 of the Karnataka Goods and Services Act/Central Goods and Services Act, 2017 (for short, hereinafter referred to as NC: 2025:KHC:10296 'KGST/CGST Act'), disallowing the ITC claimed by the petitioner- company and consequently, demanded a sum of Rs.2,20,75,208/- towards Tax and interest from the petitioner. According to the petitioner-company, it has not received either the intimation issued under Section 73(5) of the CGST Act or the show cause notice issued under Section 73(1) of the CGST Act and it was not aware of the impugned proceedings till the impugned order dated 12.03.2024 was uploaded on the Goods and Services Tax portal, pursuant to which, the petitioner-company immediately made enquiry and filed the present petition. In addition thereto, the petitioner-company also filed rectification application, which came to be rejected vide Endorsement dated 29.01.2025 (Annexure-K). Being aggrieved by the impugned orders and endorsement, the petitioner-company is before this Court by way of present petition interalia contending that the impugned proceedings/order and endorsement are violative of principles of natural justice warranting interference in the present petition.
Per contra, learned Additional Government Advocate for respondents submit that, despite the sufficient and reasonable opportunity being extended in favour of the petitioner, the NC: 2025:KHC:10296 petitioner-company did not exercise due diligence in prosecuting the matter and as such, the petitioner-company is not entitled for any indulgence in the present petition and same is liable to be dismissed.
A perusal of the material on record will indicate that, it is an undisputed fact that the petitioner-company did not submit any reply either to the intimation dated 28.11.2023 (Annexure-D) or to the show cause notice dated 08.12.2023 (Annexure-E) issued by the respondent No.
So also, the petitioner-company did not participate in the impugned proceedings, which culminated in the impugned order, which is undisputedly an ex-parte adjudication order, calling upon the petitioner-company to pay a sum of Rs.2,20,75,208/- towards tax, interest and penalty.
However, by adopting justice oriented approach and in order to provide one more opportunity to the petitioner-company to submit its reply to the show cause notice and contest the proceedings, without expressing any opinion on merits/demerits of the rival contentions, I deem it just and appropriate to set-aside the impugned order and remit the matter back to the respondent No.3 NC: 2025:KHC:10296 to the stage of petitioner-company submitting its reply to the show cause notice and to proceed further in accordance with law.
In the result, I pass the following: O R D E R i) The petition is hereby allowed; ii) The impugned adjudication order dated 12.03.2024 (Annexure-F) along with the summary of order passed under Section 73 of the KGST Act by the respondent No.3 and the endorsement dated 29.01.2025 (Annexure-K) issued by the respondent No.3 are set-aside. iii) The matter is remitted back to the respondent No.3 for reconsideration afresh in accordance with law. iv) The petitioner-company is directed to appear before the respondent No.3 on 24.03.2025 without awaiting further notice from the respondent No.2. v) The respondents are directed to revoke the attachment order passed during the pendency of the present petition. NC: 2025:KHC:10296 vi) Liberty is reserved in favour of the petitioner- company to submit reply/pleadings/documents to the show cause notice dated 08.12.2023 (Annexure-E), which shall be considered by the respondent No.3 by providing sufficient and reasonable opportunity to the petitioner-company and proceed further in accordance with law. (S.R.KRISHNA KUMAR) JUDGE
MDS List No.: 1 Sl No.: 94
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.