Dismissed

M/S. Karthik Agro Industries (P) Ltd., v. Union of India

Karnataka HC15 Apr 2024WP/100997/2024

Case brief

AI extract

What is this about?

Petitioner sought quashing of show-cause notices and tax ascertained under Section 73 of the KGST Act relating to GST on un-denatured extra neutral alcohol, contending lack of authority. The court held the statutory appeal under Section 107 was efficacious; the 10% pre-deposit was no ground for invoking writ jurisdiction, and dismissed the petition.

What the court decided

AI extract

M/S. Karthik Agro Industries (P) Ltd., Vs Union of… — GST and Indirect Tax | Karnataka HC (2024)

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NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 15^TH DAY OF APRIL, 2024

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BEFORE

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THE HON'BLE MRS. JUSTICE M.G.UMA

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WRIT PETITION NO.100997/2024(T-RES)

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BETWEEN:

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M/S. KARTHIK AGRO INDUSTRIES (P) LTD., (A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956) REPRESENTED BY ITS EXECUTIVE DIRECTOR, SRI KARTHIK L. MASHYAL, WALI BUILDING, BADAMI ROAD, BEHIND RAILWAY STATION, BAGALKOT – 587 101.

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…PETITIONER

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(BY SRI RAGHAVENDRA B. HANJER, ADVOCATE)

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AND:

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Digitally signed by MANJANNA E Location: High Court of Karnataka

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UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, DEPARTMET OF REVENUE, NORTH BLOCK, RASHTRAPATI BHAWAN, DEFENCE HEAD QUARTERS, NEW DELI – 110 001.

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THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY ITS CHAIRMAN, HAVING ITS OFFICE AT, NORTH BLOCK, RASHTRAPATI BHAWAN, DEFENCE HEAD QUARTERS, NEW DELI – 110 001.

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THE GOODS AND SERVICE TAX COUNCIL, 5^TH FLOOR, TOWER II, JEEVAN BHARTI BUILDING, JANPATH ROAD, CONNAUGHT PLACE,

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NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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NEW DELHI – 110 001, REPRESENTED BY ITS CHAIRMAN.

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STATE OF KARNATAKA, REPRESEBTED BY ITS SECRETARY, MINISTRY OF REVENUE, VIDHANA SOUDHA, AMBEDKAR VEEDHI, BANGALORE – 560 001.

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THE COMMISSIONER OF COMMERCIAL TAXES, VANIJAY THERIGE KARYALAYA – 1,

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1^ST MAIN, GANDHINAGAR, BANGALORE – 560 009.

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THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT-1) BELAGAVI, SUMOULYA SOUDHA,

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3^RD FLOOR, CLUB ROAD, BELAGAVI – 583 201.

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M/S. KARNATAKA STATE BEVERAGES CORPORATION LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, 4^TH FLOOR, TTMC ‘A’ BLOCK, BMTC BUILDING, KH ROAD, SHANTINAGAR, BANGALORE – 560 027.

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…RESPONDENTS

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(BY SRI M.B.KANAVI, ADVOCATE FOR R1; SRI GIRISH HULMANI, ADVOCATE FOR R2 AND R3; SRI P.N.HATTI, HCGP FOR R4 TO R6)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, ISSUE A WRIT OR ORDER OR DIRECTION IN THE NATURE OF WRIT OF CERTIORARI BY QUASHING THE IMPUGNED NOTICE TO SHOW CAUSE BEARING NO. DCCT(AUDIT-1)/BELAGAVI/ DRC-1A: 2023-24 T-2272 (ANNEXUREA), INFORMATION OF TAX ASCERTAINED AS BEING PAYABLE UNDER SECTION 73 OF THE GST ACT IN FORM GST DRC-01A BEARING NO. DCCT1BGM:DRC-1A:2023-24/TBOTH DATED 20.12.2023 (ANNEXURE- B) AND NOTICE TO SHOW CAUSE BEARING NO. DCCT AUDIT-1 BGM:SCN:2023-24/ T-2417 DATED 25.01.2024 (ANNEXUREC) ALL ISSUED BY THE 6^TH RESPONDENT. ALTERNATIVELY, ISSUE A WRIT OR ORDER OR DIRECTION IN THE NATURE OF WRIT OF PROHIBITION BY RESTRAINING THE RESPONDENTS FROM LEVY GST ON UN-DENATURED EXTRA NEUTRAL ALCOHOL SUPPLIED BY THE PETITIONER AS OUTSIDE THE PURVIEW OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 TILL THE NOTIFICATION IS ISSUED THE RESPONDENTS AND ETC.,

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NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING - B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has approached this court for issuance of writ in the nature of certiorari to quash the impugned show-cause notice produced as per Annexure-A, information of tax ascertained under Section 73 of the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as ‘KGST Act’ for short) produced as per Annexure-B, notice to show-cause dated 25.01.2024 issued by respondent No.6 produced as per Annexure-C.

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Heard the learned counsel Sri.Raghavendra B.Hanjer for the petitioner, learned counsel Sri.M.B.Kanavi, learned counsel Sri.Girish Hulmani for respondent Nos.2 and 3 and learned HCGP Sri.P.N.Hatti for respondent Nos.4 to 6.

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Learned counsel for the petitioner contended that Annexure-A is the show-cause notice issued by the respondents calling upon the petitioner to show-cause as

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4 - NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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to why the demand should not be raised as suggested in the show-cause notice. Annexure-B is the information of tax ascertained calling upon the petitioner to pay the tax as ascertained, failing which, to take necessary action in that regard. Annexure-C is the show-cause notice issued under Section 73 of the KGST Act, again calling upon the petitioner to show-cause as to why the demand made therein along with interest should not be made absolute.

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Learned counsel submitted that as per the resolution passed in the GST meeting, the respondents have no authority to issue such show-cause notice and to make the order absolute. Under such circumstances, Annexures-A to C which are impugned in this petition are liable to be quashed.

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Learned counsel submitted that even though show-cause notice and order as per Annexure-B was came to be passed, the same is without any authority. Therefore, challenging the said order, which was passed without jurisdiction and authority under Section 107 of the

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KGST Act would not arise. Learned counsel also submits that in order to challenge the order under Section 107 of the KGST Act, the petitioner is required to deposit 10% of the amount demanded and therefore, the petitioner is challenging Annexures-A to C before this court. Accordingly, he prays for allowing the petition.

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Per contra, learned HCGP appearing for respondent Nos.4 to 6 opposing the petition submitted that the show-cause notice as per Annexure-A was issued and final order under Section 73 of the KGST Act was passed as per Annexure-B and thereafter, one more showcause notice as per Annexure-C was issued calling upon the petitioner to show-cause as to why the said order should not be made absolute. The petitioner has not exhausted his remedy by preferring an appeal under Section 107 of the KGST Act. Therefore, the petition is not maintainable. Accordingly, he prays for dismissal of the petition.

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Perused the material on record.

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6 - NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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Admittedly, respondents issued show-cause

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notice as per Annexure-A, information of tax ascertained under Section 73 of the KGST Act as per Annexure-B and the second show-cause notice dated 25.01.2024 as per Annexure-C was issued by respondent No.6. Admittedly, the order is appealable, as provided under Section 107 of the KGST Act, whereunder any person aggrieved by any decision or order, passed under the Act, can prefer an appeal. No such appeal is preferred by the petitioner solely on the ground that as per Section 107(6)(b) of the KGST

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Act, a sum equal to ten per cent, of the amount of tax in dispute is to be deposited, while preferring the appeal. The same cannot be a reason to invoke the writ jurisdiction of this court bypassing the specific provision of law under Section 107 of the KGST Act. Even though it is contended that the show-cause notice and the order were passed without authority, the grounds which are raised by the petitioner before this court seeking to quash Annexures-A to C, the same could have been raised before the appellate authority by preferring an appeal. When an efficacious

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7 - NC: 2024:KHC-D:6369 WP No. 100997 of 2024

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remedy is available to the petitioner, I do not find any reason to exercise the writ jurisdiction of this court.

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Hence, the petition is liable to be dismissed.

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Accordingly, the petition is dismissed.

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SD/JUDGE

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MBS/CT-ASC List No.: 1 Sl No.: 0

M/S. Karthik Agro Industries (P) Ltd., v. Union of India

Case brief

What is this about?

What the court decided

M/S. Karthik Agro Industries (P) Ltd., v. Union of India

Case brief

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What the court decided

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