M/S. Principle Mahendra Private Limited vs. Deputy Commissioner Of Commercial Taxes - Karnataka High Court, 24 May 2023

Cause title — parties, addresses and appearances

- 1 - WP No. 10120 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF MAY, 2023 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 10120 OF 2023 (T-RES) BETWEEN: M/S. PRINCIPLE MAHENDRA PRIVATE LIMITED, PRESENTLY AT: NO.16/2, 1ST AND 2ND FLOOR, 17TH A CROSS, 8TH MAIN, MALLESWARAM, BENGALURU - 560 055. FORMERLY AT: NO.151, RMV 2ND STAGE, 1ST BLOCK, ARAMANE NAGAR, BENGALURU, KARNATAKA - 560 094. REPRESENTED BY MR. S. MAHENDRA KUMAR AUTHORISED SIGNATORY OF THE PETITIONER. …PETITIONER (BY SRI. LAKSHMI MENON., ADVOCATE) AND: 1. DEPUTY COMMISSIONER OF COMMERCIAL TAXES(AUDIT - 5.3), D.G.S.T.O-5, V.T.K.-2, ROOM NO.506, 5TH FLOOR, KORAMANGALA, BANGALORE-560 047. 2. JOINT COMMISSIONER OF COMMERCIAL TAXES, Digitally signed by SUMITHRA R Location: HIGH COURT OF KARNATAKA - 2 - WP No. 10120 of 2023 D.G.S.T.O-5, V.T.K.2, ROOM NO.506, 5TH FLOOR, KORAMANGALA, BANGALORE-560 047. 3. STATE OF KARNATAKA, DEPARTMENT OF FINANCE, VIDHANA SOUDHA, BANGALORE-560 001. REPRESENTED BY ITS SECRETARY. 4. UNION OF INDIA, MINISTRY OF FINANCE, OFFICE AT JEEVAN DEEP BUILDING, PARLIAMENT STREET, NEW DELHI-110 001. REPRESENTED BY ITS SECRETARY. …RESPONDENTS (BY SRI. K. HEMAKUMAR, AGA FOR R1 TO R3, BY SRI. MADANAN S PALLI, CGSC FOR R4.) ------- THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE/ QUASH THE ORDER PASSED BY THE FIRST RESPONDENT BEARING REF.NO.DCCT(AUIDT)5.3/DGSTO-5/GSTADT(17-18)/ORDER-5/ 2022-23 DATED 13.04.23 UNDER SECTIONS 73(9), 50 AND 122 (2) OF THE KARNATAKA GOODS AND SERVICES TAX ACT (KGST) / CENTRAL GOODS AND SERVICES TAX ACT, 2017 (CGST) / SECTION 20 OF THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 (IGST) READ WITH RULE 142 (5) AND (6) OF THE KGST RULES, 2017, PASSED IN THE CASE OF THE PETITIONER BY THE FIRST RESPONDENT (ANNEXURE-A) AND ETC,. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: - 3 - WP No. 10120 of 2023

ORDER

The petitioner has called in question the correctness of the order passed on 13.4.2023 under Sections 73(9), 50 & 122(2) of the Karnataka Goods and Services Tax Act (KGST) / Central Goods and Services Tax Act, 2017 (CGST) / Section 20 of the Integrated Goods and Services Tax Act, 2017 (IGST) read with Rule 142(5) and (6) of the KGST Rules, 2017 for the Tax Period 2017-18 (July 2017-March 2018) passed in the case of the petitioner by the first respondent (Annexure-A).

It is the primary contention of the petitioner that the impugned order passed is without affording an opportunity of hearing and that their reply filed in Form DRC 06 has been rejected as having been belatedly filed. It is submitted even if reply was filed belatedly, the obligation under Section 75 of the CGST Act, 2017 to afford an opportunity of hearing under Section 75(4) cannot be done away with.

Learned counsel for the Revenue would submit that, admittedly reply is filed beyond the period prescribed under Section 73(8) of the Act and rightly not been considered. It is further contended that, Section 75(4) of the Act requires

- 4 - request for an opportunity of hearing and as the request for opportunity of hearing having been made in the reply has been rejected, question of complying with the mandate of Section 75(4) of the Act does not arise and accordingly, submits that no case is made out for interference at this stage and the alternative remedy should be availed off as provided under Section 107 of the Act.

Heard both sides.

Admittedly reply has been rejected stating that, it was beyond the period prescribed. However, it must be noticed that though the reply itself came to be rejected as having been filed belatedly, in the reply filed by the petitioner, at paragraph (11) enclosed at Annexure-M he has made a request for personal hearing which reads as follows :

"Noticee wishes to be personally heard if order to the contrary is contemplated"

The mandate under Section 75(4) of the CGST Act, 2017 is clear that, when a written request is made from the person chargeable with tax or penalty seeking for personal hearing, the same is required to be considered. Clearly there is violation

- 5 - of the mandate under Section 75(4) of the Act and the submission of the learned counsel for the Revenue that the request for personal hearing was made out in the reply, which having been rejected, the request for personal hearing is also to be rejected is a hyper technical interpretation which has resulted in rejection of the opportunity under Section 75(4) of the Act, which cannot be accepted. Accordingly, case is made out for setting aside the impugned order in the light of the violation of the non granting of opportunity of personal hearing under Section 75(4) of the Act and the respondents are directed to afford an opportunity of personal hearing before proceeding with the order.

In the light of the order being passed, in order to meet the ends of justice, it is just and appropriate to direct the Authority to look into the reply that has been filed by the petitioner and also permit the petitioner to raise additional legal contentions as has been raised in the present writ petition. The petitioner however, is liable to pay costs of Rs.10,000/- to the respondents for lapse in filing a delayed reply.

Accordingly, the impugned order at Annexure-A is set aside. The petitioner to appear before respondent No.1 on 9.6.2023. It is made clear that if the petitioner does not avail of such opportunity, the respondents would be at liberty to proceed as if no order has been passed in this matter. . JUDGE rs List No.: 1 Sl No.: 10