Mr.Riyaz Ahmed vs. Assistant Commissioner Of Commercial Taxes (Audit)-4 - Karnataka High Court, 29 January 2026

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2026:KHC:4774 WP No. 2101 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 2101 OF 2026 (T-RES) BETWEEN: MR. RIYAZ AHMED, (PROPRIETOR), AGED ABOUT 58 YEARS, M/S R.J. STEEL TRADERS, R/O NO. 4740, GANESHA TEMPLE ROAD, N.R. MOHALLA, MYSORE - 570 007. …PETITIONER (BY SRI. BHARATH KUMAR V., ADVOCATE) AND: ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-4, DIVISIONAL GOODS AND SERVICE TAX OFFICE (DGSTO)-MYSORE, SHESHADRI BHAVAN, DEEWAN'S ROAD, MYSORE - 570 024. …RESPONDENT (BY SRI. HEMA KUMAR, AGA) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 25.07.2025 BEARING

ORDER REFERENCE NO.ZD290725107021P IN ADJUDICATION CASE ID VIJAYA P Location: HIGH COURT OF KARNATAKA HC-KAR NC: 2026:KHC:4774 NO.AD290125040161K, PASSED BY THE RESPONDER UNDER SECTION 74(9) OF THE KGST ACT, 2017 R/W RULE 142(5) OF THE KGST RULES 2017 FOR THE TAX PERIOD JANUARY 2022 TO FEBRUARY 2022 (ANNEXURE A).

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER The petitioner has called in question the validity of the adjudication order passed under Section 74(9) of the Karnataka Goods and Services Tax Act, 2017. 2. It is stated that the order is in-effect an ex-parte order and due to bona-fide reasons, petitioner was not in a position to make out a reply to the show cause notice. It is submitted that the notice was uploaded in the portal which did not come to the knowledge of the assessee, which is the reason why no reply was made out.

Learned counsel for the petitioner submits that insofar as the adjudication, the petitioner had lawful HC-KAR NC: 2026:KHC:4774 grounds to make out a reply to the show cause notice to demonstrate that the ITC availed of, was pursuant to genuine transactions and such factum would be demonstrated in reply to the show cause notice, if an opportunity is granted.

Learned Additional Government Advocate submits that the Court ought to be very strict with respect to input tax credit claimed on fake invoices. However, he submits that noticing that the matter is an ex-parte order, Court may pass appropriate orders.

Taking note of the consequences that would visit the petitioner and also that allegation being grave, it would be appropriate that petitioner meets the said allegation on its merits. Accordingly, the order at Annexure-A is set aside. Matter is remitted to the stage of reply to the show cause notice. Petitioner to pay 10% of tax amount if the same has not already been appropriated HC-KAR NC: 2026:KHC:4774 by the revenue, within a period of four weeks. All contentions are kept open. Accordingly, petition is disposed of. (S SUNIL DUTT YADAV) JUDGE MCR