M/S Sri. Nanjudeshwara Tyre Retreaders Vs the… — GST and Indirect Tax | Karnataka HC (2025)

M/S Sri. Nanjudeshwara Tyre Retreaders Vs the… — GST and Indirect Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Petition allowed subject to deposit of Rs.15,000 as cost to the Karnataka High Court Legal Services Authority, Bengaluru, within six weeks; impugned orders dated 06.04.2024 and 15.07.2024 (Annexures J and L) set aside; matter remitted to the 1st respondent (Assistant Commissioner of Commercial Taxes (Adjudication), Local GST Office-180, Kolar) for fresh consideration from the stage of the Section 73(1) show-cause notices dated 16.12.2023 and 30.03.2024; petitioner to appear on 04.12.2025 without awaiting notice, with liberty to submit replies and documents; order to stand automatically recalled if the petitioner fails to appear.

Issue for consideration

Whether the ex parte final orders dated 06.04.2024 and 15.07.2024 passed under Section 73(9) of the KGST Act, 2017 confirming demands of Rs.9,76,306 and Rs.5,40,318 ought to be set aside and one more opportunity afforded to the petitioner to reply to the show-cause notices dated 16.12.2023 and 30.03.2024 and contest the proceedings.

Court's answer

Adopting a justice-oriented approach, the Court held it just and appropriate to grant the petitioner one more opportunity by setting aside the impugned orders dated 06.04.2024 and 15.07.2024 and remitting the matter to the 1st respondent for fresh reconsideration in accordance with law from the stage of the petitioner submitting reply to the show-cause notices dated 16.12.2023 and 30.03.2024.

Ratio / Principle

The petition was allowed subject to the petitioner depositing a cost of Rs.15,000 to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks.

Key takeaways

The impugned orders dated 06.04.2024 and 15.07.2024 passed by the 1st respondent under Section 73(9) of the KGST Act, 2017 (Annexures J and L) were set aside.ratio¶55
The matter was remitted back to the 1st respondent for reconsideration afresh in accordance with law from the stage of the notices dated 16.12.2023 and 30.03.2024 issued under Section 73(1) of the CGST/KGST Act, 2017 (Annexures D and G).ratio¶56
Liberty was reserved to the petitioner to submit replies, documents etc.; the 1st respondent shall consider them, provide sufficient and reasonable opportunity, hear the petitioner and proceed further in accordance with law.

Detailed headnote1 paragraphs

Ex parte GST adjudication orders set aside and matter remanded on payment of costs — justice-oriented approach. A proprietary retreading business challenged, under Articles 226 and 227, two final orders in Form GST DRC-07 passed ex parte under Section 73(9) of the KGST Act, 2017 by the Assistant Commissioner of Commercial Taxes (Adjudication), Local GST Office-180, Kolar — dated 06.04.2024 for tax period April 2018-March 2019 confirming demand of Rs.9,76,306, and dated 15.07.2024 for tax period April 2019-March 2020 confirming demand of Rs.5,40,318 (each including tax, interest and penalty) — after intimation notices in Form GST DRC-01A (28.11.2023, 20.03.2024) and show-cause notices under Section 73(1) (16.12.2023, 30.03.2024) alleging discrepancies in claiming of Output tax credit went unanswered; the petitioner also sought quashing of a communication dated 27.05.2025 directing Karnataka Bank to create a lien of Rs.9,76,306 over its account. Holding the petitioner's failure to reply attributable to bonafide reasons, unavoidable circumstances and sufficient cause, the Court allowed the petition subject to deposit of Rs.15,000 with the Karnataka High Court Legal Services Authority within six weeks, set aside both impugned orders, and remitted the matter for fresh consideration from the stage of the Section 73(1) show-cause notices, directing the petitioner to appear on 04.12.2025 without awaiting notice, reserving liberty to submit replies and documents to be considered after affording sufficient and reasonable opportunity, and stipulating that the order shall stand automatically recalled if the petitioner fails to appear.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 6^TH DAY OF NOVEMBER, 2025

BEFORE

THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 32554 OF 2025 (T-RES)

BETWEEN:

M/S SRI. NANJUNDESHWARA TYRE RETREADERS REPRESENTED BY ITS PROPRIETOR, SRI VENKATESH BYRAPPA AGED ABOUT 56 YEARS, HAVING ITS PRINCIPAL PLACE OF BUSINESS AT PLOT NO V-7, TAMAKA INDUSTRIAL ESTATE, TAMAKA KOLAR 563101 REGISTERED UNDER GST BEARING GSTIN 29ABZPB586MIZK

…PETITIONER

(BY SRI. MANOJ S N, ADVOCATE)

AND:

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

THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ADJUDICATION) OFFICE OF THE ASSISTANT COMMISSIONER, LOCAL GST OFFICE - 180, KOLAR, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KARNATAKA, KOLAR 563101.

THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) OFFICE OF THE JOINT COMMISSIONER (APPEALS), BENGALURU DIVISION, VANIJYA THERIGE KARYALAYA, QUEENS ROAD, BENGALURU – 560 001.

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THE COMMISSIONER OF COMMERCIAL TAXES (KARNATAKA) VANIJYA THERIGE KARYALAYA, GANDHINAGAR,

BENGALURU – 560 009.

…RESPONDENTS

(BY SRI. HEMA KUMAR K., AGA)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUITON OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI AND QUASH THE FINAL ORDER IN FORM GST DRC-07 BEARING REFERENCE NO. ACCT/LOSTO-180/ADJUDICATION/ORDER/R1 VS 3B/2024-25 DATED 06.04.2024 PASSED UNDER SECTION 73 OF THE COST/KGST ACT, 2017 FOR THE TAX PERIOD 2018 TO 2019, AS PER ANNEXURE-J AND ETC.

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

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

ORAL ORDER

In this petition, petitioner seeks the following reliefs:-

“ a) Issue a Writ of Certiorari and quash the final order in Form GST DRC-07 bearing Reference No.ACCT/LGSTO-180/ADJUDICATION/ORDER/R1 VS 3B/2024-25 dated: 06.04.2024, passed under Section 73 of the CGST/KGST Act, 2017 for the tax period 2018 to r019, as per Annexure-J.

b) Issue a Writ of Certiorari and quash the final order in Form GST DRC-07bearing Reference No.CTO(P)/LGSTO-180/ADJUDICATION/ORDER/2A VS 3B/2024-25 dated: 15.07.2024, passed under Section 73 of eth CGST/KGST Act, 2017 for the tax period 2019 to 2020, as per Annexure-L.

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c) Issue a Writ of Certiorari and quash the communication dated: 27.05.2025, issued by the Respondent authorities to the Karnataka Bank, directing the Bank to create a lien of Rs.9,76,306/- over the Petitioner’s account in furtherance of the impugned order dated: 06.04.2024, as per Annexure-N and

d) Pass such other and further order or direction as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity.”

Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.

A perusal of material on record will indicate that the 1^st respondent issued intimation notices under Form GST DRC-01A dated 28.11.2023 and 20.03.2024 for Tax periods April 2018 to March 2019 and April 2019 till March 2020, respectively to the petitioner, who did not issue any reply / response to the same. Subsequently, the 1^st respondent issued show-cause notices dated 16.12.2023 and 30.03.2024, respectively, under Section 73(1) of

the CGST/KGST Act, 2017 alleging that there are certain discrepancies in claiming of Output tax credit. Since the petitioner did not submit his reply to the said show-cause notices also, the 1^st

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respondent proceeded to pass the impugned orders dated 06.04.2024 and 15.07.2024 respectively for Tax periods April 2018 to March 2019 and April 2019 till March 2020 under Section 73(9) of the KGST Act, 2017 confirming the total demand of Rs.9,76,306/- and Rs.5,40,318/- respectively including the tax, interest and penalty.

Learned counsel for the petitioner submits that the said notices were not received by the petitioner and hence it couldn't submit replies / documents to neither the pre-intimation notices nor the show-cause notices under Section 73(1) of the CGST/KGST Act, 2017 and resultantly, couldn’t contest the proceedings. Aggrieved by the said orders, the petitioner having no option has approached this Court by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit reply to the pre-intimation notices and showcause notices 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 orders, the petitioner would submit a reply to the show-cause notices and contest the proceedings.

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Per contra, learned AGA for the respondents submits

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

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 fact that the petitioner did not file its reply / documents culminated in the impugned ex-parte order.

Under these circumstances, having regard to the specific assertion on the part of the petitioner that its 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 orders dated 06.04.2024 and 15.07.2024 and remitting the matter back to the 1^st respondent for reconsideration of the matter afresh in accordance with law from the stage of petitioner submitting reply to the impugned show-cause notices dated 16.12.2023 and 30.03.2024 respectively.

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In the result, I pass the following:

ORDER

(i) The petition is hereby allowed subject to the petitioner depositing cost of Rs.15,000/- to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks from today.

(ii) The impugned orders dated 06.04.2024 and 15.07.2024 passed by the 1^st respondent under 73(9) of the KGST Act, 2017 at Annexures – J and L are hereby set aside.

(iii) The matter is remitted back to the 1^st respondent for reconsideration afresh in accordance with law from the stage Notice dated 16.12.2023 and 30.03.2024 issued under Section 73(1) of the CGST/KGST Act, 2017 at Annexures – D and G, respectively.

(iv) The petitioner is directed to appear before the 1^st respondent on 04.12.2025 without awaiting further notice from the 1^st respondent.

(v) Liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the 1^st respondent, who shall provide sufficient and reasonable opportunity to the petitioner and hear it and proceed further in accordance with law.

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(vi) In the event, the petitioner does not appear before the 1^st respondent on 04.12.2025 as stated supra, present order shall stand automatically recalled without further orders.

Sd/(S.R.KRISHNA KUMAR) JUDGE

SV

List No.: 2 Sl No.: 45