M/S. Anchor Supply Chain vs. The State Of Karnataka - Karnataka High Court, 23 February 2023

Cause title — parties, addresses and appearances

- 1 - WP No. 26061 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF FEBRUARY, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 26061 OF 2022 (T-RES) BETWEEN: 1. M/S. ANCHOR SUPPLY CHAIN REP. BY ITS SOLE PROPRIETOR SMT. SURABHI MALLARADHYA W/O RAJESH REVENNASIDDAIAH AGED ABOUT 42 YEARS HAVING OFFICER AT NO.740 23RD CROSS, 23RD MAIN 1ST PHASE RAJARAJESHWARINAGAR BENGALURU – 560 098. …PETITIONER (BY SRI. T SESHAGIRI RAO, ADVOCATE) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS CHIEF SECRETARY DEPARTMENT OF FINANCE VIKASA SOUDHA BENGALURU – 560 001. 2. COMMISSIONER OF COMMERCIAL TAXESDEPARTMENT OF Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - WP No. 26061 of 2022 COMMERCIAL TAXES VANIJYA THERIGE KARYALAYA KALIDASA MARG GANDHINAGAR BENGALURU – 560 009. 3. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES PIONEER PLAZA KENCHANAHALLI MAIN ROAD RAJARAJESHWARI NAGAR BENGALURU – 560 098. 4. M/S A V GLOBAL CORPORATION PVT LTD A COMPANY REGISTERED UNDER INDIAN COMPANIES ACT REPRESENTED BY ITS AUTHORISED SIGNATORY MR. VIJAY MEHTA 5. M/S A V TRANSPORT PVT LTD A COMPANY REGISTERED UNDER INDIAN COMPANIES ACT SOLE PROPRIETORY CONCERN REPRESENTED BY ITS AUTHORISED SIGNATORY MR VIJAY MEHTA BOTH HAVING OFFICE AT NEW DELHI HOUSE NO.201, 27 BARAKHAMBA ROAD NEW DELHI – 110 001. 6. M/S HEWLETT PACKARD ENTERPRISES INDIA PVT LTD A COMPANY REGISTERED UNDER INDIAN COMPANIES ACT REPRESENTED BY ITS SOLE PROPRIETOR 7. M/S HEWLETT PACKARD INDIA SALES PVT LTD A COMPANY REGISTERED UNDER INDIAN COMPANIES ACT, - 3 - WP No. 26061 of 2022 BOTH HAVING OFFICER AT CYBER CITY BUILDING NO.2 DLF CYBER GREEN 2ND AND 3RD FLOOR TOWER PHASE III D AND E GURUGRAM, HARYANA - 12202. …RESPONDENTS (BY SRI.K.HEMAKUMAR, AGA FOR R1 TO R3; NOTICE TO R4 AND R5 DISPENSED WITH V/O DTD.23.02.2023) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF INDIAN CONSTITUTION, PRAYING TO QUASHING THE IMPUGNED

ORDER BEARING NO.JDN/CR-132/2021.22 OF ASSESSMENT DATED 11.08.22 PASSED UNDER SECTION 73(9) OF KARNATAKA GOODS AND SERVICES ACT AND CENTRAL GOODS AND SERVICE ACT, 2017 BEING IN NEXUS AND CONTRAVENTION TO ANNEXURE-J NOTICE DATED 01.07.21 SEEKING ADDL. INFORMATION THEREFORE THE PRELIMINARY REPORT/ OBSERVATION REPORT PASSED BY RESPONDENT NUMBER 3 FOUND AT ANNEXURE-A AND ETC.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

- 4 - ORDER

The petitioner has called in question the order dated 11.08.2022 by the third respondent, who is only described as ‘Deputy Commissioner of Commercial Taxes’ in the cause title of the petition. It is submitted in unison that the concerned respondent would be ‘the Deputy Commissioner of Commercial Taxes, [Audit-2.1], DGSTO-02, Bengaluru’. The impugned order is under Section 73[9] of the Karnataka Goods and Services Tax Act, 2017 [for short, ‘KGST Act, 2017’] read with Rule 142[5] of the Karnataka Goods and Services Tax Rules, 2017 [for short, ‘Rules, 2017’].

Sri. Sunil S Rao, the learned counsel for the petitioner and Sri. K Hemakumar, the learned Additional Government Advocate, who appears for the first to third respondents, are heard for final disposal of this petition on the short question whether the petitioner is issued with due notice and extended

- 5 - with appropriate opportunity as contemplated under the provisions of Section 73 of the KGST Act, 2017. As the petition is being disposed of on this ground, the service of notice to the other respondents stands dispensed with.

Sri. Sunil S Rao, the learned counsel for the petitioner, submits that notice in DRC-01A and the Notice in DRC-01 are issued on the same day viz., 05.03.2022, and on receipt of the notices in DRC-01A and DRC-01, the petitioner has submitted a letter on 13.06.2022 requesting for two weeks to respond to the notices. The petitioner is not extended with such opportunity, and the subsequent notices are not served on the petitioner because these are addressed to Sri. Mallaradhya Surabhi and these communications are returned unserved because Sri. Mallaradhya Surabhi is no more.

Sri K Hemakumar, on the other hand, submits that the petitioner cannot have grievance

- 6 - with DRC-01 and DRC-01A being issued on the same date as DRC-01A is only an intimation. The petitioner has responded to the notice in DRC-01 by his communication dated 13.06.2022 requesting for further two weeks. He argues that DRC-01, which is issued on 05.03.2022, is received by the petitioner, and therefore, he cannot contend that he is not served with the endorsement of hearing dated 12.07.2022. However, what remains salient is that Sri K Hemakumar cannot dispute that the communication dated 12.07.2022 is addressed to Sri. Mallaradhya Surabhi and is not served on the petitioner. In any event, an opportunity to show cause against an Order under Section 73[9] must be extended under the provisions of Section 73 of the KGST Act.

In the circumstances of the case, this Court is of the considered view that the petitioner must succeed on the limited ground of lack of

- 7 - adequate opportunity and the proceedings restored to the third respondent viz., the Deputy Commissioner of Commercial Taxes [Audit 2.1], DGSTO-02, Bengaluru for reconsideration with liberty to the petitioner to appear before this Authority without further notice on the date fixed by this Court. It must be clarified that in the peculiarities of the case, with the petitioner being extended an opportunity to file objections and to show cause against an Order under Section 73[9] of the KGST Act, 2017, the petitioner shall not have grievance on the ground that notices have not been issued in DRC-01. Hence the following: ORDER

[a] The petition is allowed in part, and the impugned order dated 11.08.2022 [Annexure-A] and the consequential Order dated 23.11.2022 [Annexure-A1] are quashed and the proceedings

- 8 - restored to the third respondent for reconsideration.

[b] The petitioner, without further notice from the aforesaid, shall appear before the third respondent on 28.03.2023 and it shall on such date file all objections/responses. JUDGE

AN/-