M/S Ss Decor vs. The Joint Commissioner Of Commercial Tax Appeals - 9

Held

The Court allowed the petition in part. It quashed the Order-in-Appeal (Annexure A1 and B1), Order-in-Original (Annexure A2 and B2), and Summary of Order-in-Original (Annexure A3 and B3) for the tax periods 2023-24 and 2024-25. The proceedings were restored to the stage of the Show Cause Notices dated January 15, 2025. The petitioner was granted an opportunity to file a further response, and the Deputy Commissioner of Commercial Taxes (Audit) was directed to examine all circumstances and pass a detailed order. The Court reasoned that given the prior order quashing the cancellation of M/s. Parmeshwari Distributor's registration and its subsequent restoration, it was appropriate to allow the petitioner to present their case afresh at the show cause notice stage. The Garnishee Notice in FORM GST DRC-13 (Annexure C) was also quashed. The petitioner was directed to file their response by October 24, 2026.

Facts

The petitioner, M/s SS Decor, challenged orders and notices related to GST for tax periods 2023-24 and 2024-25. These proceedings were initiated based on the premise that the petitioner's transactions were with an entity, M/s. Parmeshwari Distributor, whose GST registration was cancelled. The cancellation of M/s. Parmeshwari Distributor's registration was itself under challenge in a separate writ petition (W.P.No.12405/2025). This Court had previously allowed W.P.No.12405/2025 on June 6, 2025, quashing the cancellation order and restoring the proceedings for M/s. Parmeshwari Distributor to respond to the show cause notices for cancellation. Subsequently, the Central Tax Authorities restored M/s. Parmeshwari Distributor's registration. The petitioner argued that their response to the show cause notices was contingent on the outcome of the proceedings concerning M/s. Parmeshwari Distributor.

Key Issues

1. Whether this Court must, notwithstanding the dismissal of the appeal under Section 107 of the CGST/KGST Act, restore the proceedings to the stage of the Show Cause Notices dated January 15, 2025, with liberty to the petitioner to file a further response and for the second respondent to consider it and decide afresh? Petitioner's contention: The petitioner argued that their response to the show cause notices was dependent on the outcome of the proceedings concerning M/s. Parmeshwari Distributor, whose GST registration cancellation was quashed by this Court. They contended that since the registration of M/s. Parmeshwari Distributor was restored, the proceedings against the petitioner should be restored to the stage of the show cause notice to allow them to present their case considering the restored registration. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state.