M/S Program Development Company Llc Vs the State of Karnataka

M/S PROGRAM DEVELOPMENT COMPANY LLC COMPANY REGISTERED IN USA HAVING ESTABLISHED ITS PLACE OF BUSINESS AT NO.39/2, 1^ST FLOOR, HENNUR MAIN ROAD, NEXT TO DAUGHTERS OF ST. CAMILLUS, KALYANNAGAR, POST, BENGALURU – 560 043 E-MAL ID: [email protected] MOBILE NO. 9739997897 FINANCIAL YEAR 2020-2021 REGISTERED UNDER COMPANIES ACT, 1956

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…PETITIONER

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(BY SRI. S. GURU PRASANNA, ADVOCATE)

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AND:

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Digitally signed by CHANDANA B M Location: High Court of Karnataka

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THE STATE OF KARNATAKA DEPARTMENT OF COMMERCIAL TAXES VIDHANA SOUDHA, BENGALURU – 560 001.

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THE ASST. COMMISSIONER OF COMMERCIAL TAXES, LGSTO-55, SHOP NO.11, BDA COMPLEX, HSR LAYOUT, KALYAN NAGAR, BENGALURU – 560 043. PH NO.: 080-25437747, EMAIL ID: [email protected]

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THE JOINT COMMISSIONER OF COMMERCIAL TAXES, JCCT (APPEALS)-09, KORAMANGALA, BENGALURU – 560 095

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…RESPONDENTS

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(BY SMT. JYOTI M. MARADI, HCGP)

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NC: 2025:KHC:47486 WP No. 31756 of 2025

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HC-KAR

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THIS W.P. IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER-IN-ORIGINAL DATED 27.02.2025 AT ANNEXURE- A PASSED BY RESPONDENT NO. 2, THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO-55, BENGALURU, FOR THE FINANCIAL YEAR 2020-2021, ASSIGNEMENT NO.10523/2024-25 AND ETC.,

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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In this petition, petitioner seeks for the following reliefs:-

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“A. Issue a Writ of Certiorari or any other appropriate writ, order, or direction, setting aside the impugned Orderin-Original dated 27.02.2025 at Annexure-A passed by Respondent No.2, the Assistant Commissioner of Commercial Taxes, LGSTO-55, Bengaluru, for the Financial Year 2020-2021; Assignment No.10523/2024-25.

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B. Issue a Writ of Mandamus or any other appropriate writ, order or direction, directing the Respondent No.2 to conduct a fresh assessment/reassessment for the Financial year 2020-21 in accordance with law, after providing a fair and reasonable opportunity of being heard to the Petitioner, and by taking into consideration all the submissions and documents filed by the Petitioner.

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C. Grant such other consequential reliefs as this Hon’ble Court may deem fit and proper in the facts and

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NC: 2025:KHC:47486 WP No. 31756 of 2025

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HC-KAR

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circumstances of the case, including the costs of this petition.”

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Heard learned counsel for the petitioner and learned

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HCGP for the respondents and perused the material on record.

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A perusal of material on record will indicate that pursuant to notice in Form GST ASMT-10 dated 06.09.2023, the second respondent issued an intimation notice under Form GST DRC-01A dated 19.10.2024 to the petitioner, who did not issue any reply/response to the same. Subsequently, the second respondent issued a show-cause notice dated 11.11.2024 under Section 73 of the CGST/KGST Act, 2017 alleging that there are discrepancies in tax liability. Since the petitioner did not submit his reply to the said show-cause notice also, the second respondent proceeded to pass the impugned order dated 27.02.2025 under Section 73 of the KGST Act, 2017 confirming the total demand of Rs.51,26,751/including the tax, interest and penalty.

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Learned counsel for the petitioner submits that due to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner couldn't submit replies/ documents to neither the preintimation notice nor the show-cause notice under section 73 of the

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HC-KAR

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CGST/KGST Act, 2017 and resultantly couldn’t contest the proceedings. Pursuant to the impugned order passed, the petitioner filed an appeal on 03.07.2025 which was dismissed on the ground of delay in submission of appeal vide impugned order dated 11.07.2025. It is submitted that since the GST Appellate Tribunal has not been constituted as on today, the petitioner has no option but to approach this Court by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit a reply to the pre-intimation notice and show-cause notice and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause and submits that if one more opportunity is provided, by setting aside the impugned order, the petitioner would submit a reply to the show-cause notice and contest the proceedings.

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Per contra, learned HCGP for the respondents submits

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that there is no merit in the petition and the same is liable to be dismissed.

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Though several contentions have been urged by both sides, the counsel for the petitioner submits that due to bonafide reasons, unavoidable circumstances and sufficient cause and the

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HC-KAR

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fact that the petitioner did not file its reply/ documents culminated in the impugned ex-parte order. So also, the appeal filed by the petitioner before the third respondent has been dismissed as barred by limitation.

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Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned order dated 27.02.2025 and by remitting the matter back to the second respondent for reconsideration of the matter afresh, in accordance with law, from the stage of petitioner submitting reply to the impugned show-cause notice dated 11.11.2024 by imposing a cost of Rs.15,000/- on the petitioner payable to Karnataka high court legal service authority

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In the result, I pass the following:

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ORDER

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(i) The petition is hereby allowed on cost of Rs. 15,000/payable by the petitioner to the Karnataka High Court Legal

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HC-KAR

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Service Authority, Bengaluru, within a period of six weeks from today.

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(ii) The impugned order dated 27.02.2025 passed by the second respondent under 73 of the KGST Act, 2017 at Annexure – A as well as the impugned order dated 11.07.2025 passed by the third respondent under Section 107(11) of the SGST/CGST Act, 2017 are hereby set aside.

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(iii) The matter is remitted back to the second respondent for reconsideration afresh in accordance with law, from the stage of petitioner submitting its reply to the notice dated 11.11.2024 issued under section 73 of the CGST/KGST Act, 2017 at Annexure – B..

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(iv) The petitioner is directed to appear before the second respondent on 15.12.2025 without awaiting further notice from the second respondent.

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(v) Liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the first respondent who shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further, in accordance with law.

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