Disposed

C. Krishniah Chetty and C0. Pvt. Ltd. v. State of Karnataka

Karnataka HC22 Oct 2024WP/23093/2024

Case brief

AI extract

What is this about?

GST cancellation proceedings were initiated against a company following a third party's complaint over its trade name. The court held the officer had jurisdiction, found interference premature at the show cause notice stage, and directed the petitioner to file a reply before the authority, which was to pass orders in accordance with law.

What the court decided

AI extract

C. Krishniah Chetty and C0. Pvt. Ltd. Vs State of… — GST and Indirect Tax | Karnataka HC (2024)

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1 - NC: 2024:KHC:42411 WP No. 23093 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF OCTOBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO.23093 OF 2024 (T-RES)

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BETWEEN:

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C. KRISHNIAH CHETTY & C0. PVT. LTD. A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT 2/4 THE TOUCH STONE, 'B' BLOCK MAIN GUARD CROSS ROAD BANGALORE-560 001 GST NO.29AAACD5120H1ZY THROUGH ITS AUTHORIZED REPRESENTATIVE AND DIRECTOR MR. C. GANESH NARAYAN.

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Digitally signed by CHAITHANYA K Location: High Court of Karnataka

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C. GANESH NARAYAN S/O LATE C V NARAYAN AGED ABOUT 43 YEARS RESIDING AT NO.44 OSBORNE ROAD BANGALORE-560 042.

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…PETITIONERS

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(BY SRI VIKRAM S. HUILGOL, SENIOR ADVOCATE FOR SMT. KRUTIKA RAGHAVAN, ADVOCATE)

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AND:

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STATE OF KARNATAKA THROUGH DEPARTMENT OF COMMERCIAL TAXES VANIJYA THERIGE KARYALAYA KALIDASA ROAD, GROUND FLOOR

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NC: 2024:KHC:42411 WP No. 23093 of 2024

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GANDHINAGAR BANGALORE-560 009.

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ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO-20 NO.19/3, 2ND FLOOR, CUNNINGHAM RAOD BANGALORE-560 052

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…RESPONDENTS

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(BY SMT. JYOTHI M. MARADI, HCGP FOR R-1 & R-2; SRI K.G. RAGHAVAN, SENIOR ADVOCATE FOR SRI HITESH GOWDA B.J., FOR IMPLEADING APPLICANTS)

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THIS PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH AND SET ASIDE THE IMPUGNED COMMUNICATION, DATED 24.07.2024, ISSUED BY THE RESPONDENT NO.2, BEARING NO.AACT/LGSTO/20/T.NO.-231/2024-25 AT ANNEXURE-A, AS BEING ILLEGAL, ARBITRARY AND VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE, ETC.

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THIS PETITION COMING ON FOR ORDERS, THROUGH PHYSICAL HEARING/VIDEO CONFERENCING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.I.ARUN

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3 - NC: 2024:KHC:42411 WP No. 23093 of 2024

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ORAL ORDER

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Petitioner no.1 is a private limited company and is incorporated in the name and style of C.Krishniah Chetty & C 0 . Pvt. Ltd. It has been granted GST registration in which the trade name is mentioned as C.Krishniah Chetty & Co. Pvt. Ltd. On the complaint made by a third party namely, C.Krishniah Chetty & Sons Pvt. Ltd., proceedings have been sought to be initiated against petitioner no.1 by respondent no.2 by issuing a show cause notice for cancellation of registration of GST. Aggrieved by the same, the present writ petition is filed.

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The case of the petitioners is that respondent no.2 does not have the necessary jurisdiction to initiate the proceedings and furthermore, the notice issued by respondent no.2 alleges violation of Section 29(2)(a) of the Central Goods and Services Tax Act, 2017, by petitioner no.1 and the communication does not reveal the said violation to be done by petitioner no.1 and on the said grounds, it is prayed that the proceedings initiated against the petitioners be set aside.

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NC: 2024:KHC:42411 WP No. 23093 of 2024

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Per contra, the learned HCGP appearing for the respondents, upon instructions, justifies the impugned proceedings and prays for dismissal of the writ petition.

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Admittedly, the name of petitioner no.1 company is registered as C.Krishniah Chetty & C 0 . Pvt.Ltd. and the trade name in GST is mentioned as C.Krishniah Chetty & Co.Pvt.Ltd. There is also another entity in the name and style of C.Krishniah Chetty & Sons Pvt.Ltd. and there are several disputes between both the companies. On the ground that given the name of petitioner no.1 company, it could not have a trade name in the name and style of C.Krishniah Chetty & Co.Pvt.Ltd., the present action is initiated by respondent no.2.

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5. Section 29(2) of the Central Goods and Services Tax

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Act, 2017 reads as under:

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" 29. Cancellation of registration

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(1) xxxxxxxxxxxxxxxxxxxxxxxxxx

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(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,-

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5 - NC: 2024:KHC:42411 WP No. 23093 of 2024

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(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

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(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or

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(c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

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(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

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(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

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PROVIDED that the proper officer shall not cancel the

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registration without giving the person an opportunity of being heard."

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Admittedly, respondent no.2 is the proper person as envisaged under the said section and he has the necessary

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jurisdiction to make inquiry regarding the cancellation or suspension of registration of GST and he is also authorised to pass necessary orders. It is possible in the course of his work, a notice might have been issued under erroneous provision of law. Petitioner no.1 is having the liberty to reply to the said notice. Petitioner no.1 is also having the liberty to take up such contention including the

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6 - NC: 2024:KHC:42411 WP No. 23093 of 2024

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jurisdictional aspect in its reply before respondent no.2. Petitioner no.1 can also plead any amendments which are required for the existing trade name. If petitioner no.1 is able to show that the authorised person is not proceeding under the correct provision of law, the authorised person also has the liberty to initiate appropriate proceedings in accordance with law. What has been issued in the instant case is only a show cause notice, requesting petitioner no.1 for clarification and supporting documents regarding the allegations made against it. It is for the authorities concerned (respondent no.2) to hear the party concerned

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and pass orders in accordance with law. It would be premature for this Court to interfere in the said proceedings at this particular stage itself.

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For the aforementioned reasons, I pass the following:

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ORDER

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(i) Petitioners shall appear before respondent no.2 on 05.11.2024 and file their reply, if any;

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NC: 2024:KHC:42411 WP No. 23093 of 2024

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(ii) Respondent no.2 after considering the reply shall pass appropriate orders in accordance with law as expeditiously as possible;

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(iii) The writ petition stands disposed of accordingly;

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(iv) Pending IAs. does not survive for consideration.

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Sd/(M.I.ARUN) JUDGE

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hkh.

C. Krishniah Chetty and C0. Pvt. Ltd. v. State of Karnataka

Case brief

What is this about?

What the court decided

C. Krishniah Chetty and C0. Pvt. Ltd. v. State of Karnataka

Case brief

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