M/S. Hk Construction Vs State of Karnataka

THIS WRIT PETITION UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA IS FILED PRAYING TO-A) QUASH THE IMPUGNED SHOW CAUSE NOTICE BEARING NO. CTO AUDIT-4.10/SCN-DRC-01/2024-25 DATED 26.11.2024 IN FORM GST DRC-01 (ANNEXURE- A1) ALONG WITH SUMMARY OF THE SHOW CAUSE NOTICE BEARING REFERENCE NO. ZD2911241327479 DATED 26.11.2024 ISSUED IN FORM GST DRC-01 (ANNEXURE- A2) BY THE 2ND RESPONDENT AND THE IMPUGNED EX PARTE ADJUDICATION ORDER BEARING NO. CTO AUDIT-4.10/DRC-07/2024-25 DATED 18.01.2025 (ANNEXURE-B1) ALONG WITH SUMMARY OF THE ORDER BEARING REFERENCE NO. ZD290125069697T DATED 18.01.2025 (ANNEXURE-B2) PASSED IN FORM GST DRC-07 BY THE 2ND RESPONDENT. B) SET ASIDE THE TAX DEMAND TO RS.36,48,636/- ALONG WITH INTEREST OF RS.27,21,572/AND ALSO LATE FEE OF RS.2,01,000/-AND PENALTY OF RS.3,64,864/- CONFIRMED/ IMPOSED FOR THE TAX PERIOD 2020-21 IN THE IMPUGNED EX PARTE ADJUDICATION ORDER BEARING NO. CTO AUDIT-4.10/DRC-07/2024-25 DATED 18.01.2025 (ANNEXURE- B1) ALONG WITH SUMMARY OF THE ORDER BEARING REFERENCE NO. ZD290125069697T DATED 18.01.2025 (ANNEXURE- B2) ISSUED / PASSED IN FORM GST DRC-07 BY THE 2ND RESPONDENT.

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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 the following reliefs:

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" WHEREFORE, the Petitioner respectfully pray that this Hon'ble Court be pleased to:

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a) Issue a writ or order or direction in the nature of Certiorari quashing the impugned Show Cause

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HC-KAR

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Notice bearing No. CTO Audit-4.10/SCN-DRC01/2024-25 dated 26.11.2024 in FORM GST DRC01 (Annexure- 'A1') along with Summary of the Show Cause Notice bearing Reference No. ZD2911241327479 dated 26.11.2024 issued in FORM GST DRC-01 (Annexure- 'A2') by the 2^nd Respondent and the impugned ex parte Adjudication Order bearing No. CTO Audit4.10/DRC-07/2024-25 dated 18.01.2025 (Annexure-'B1') along with Summary of the Order bearing Reference No: ZD290125069697T dated 18.01.2025 (Annexure-'B2') passed in FORM GST DRC-07 by the 2^nd Respondent;

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b) Issue a writ or order or direction in the nature of any writ by setting aside the tax demand to Rs.36,48,636/along with interest of Rs.27,21,572/- and also late fee of Rs.2,01,000/and penalty of Rs.3,64,864/-confirmed/ imposed for the tax period 2020-21 in the impugned ex parte Adjudication Order bearing No. CTO Audit4.10/DRC-07/2024-25 dated 18.01.2025 (Annexure- 'B1') along with Summary of the Order bearing Reference No: ZD290125069697T dated 18.01.2025 (Annexure- 'B2') issued / passed in FORM GST DRC-07 by the 2^nd Respondent;

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c) Pass such other order(s) or direction(s) as deemed fit and proper in the facts and circumstances of the case in the interest of justice."

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Heard learned counsel for the petitioner and

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learned AGA for the respondents and perused the material on record.

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HC-KAR

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A perusal of material on record will indicate that pursuant to an Intimation in Form DRC-07 dated 18.01.2025, the 2^nd respondent issued a show-cause notice dated 26.11.2024 under Section 73(1) of the CGST/KGST Act, 2017 alleging that there was shortdeclaration of output tax liability. The petitioner filed its reply to the aforesaid Show-cause notice dated 26.11.2024 and sought for personal hearing. Subsequently, the 2^nd respondent passed an adjudication order dated 18.01.2025 under Section 73(9) of the CGST / KGST Act confirming a total demand of Rs.36,48,636/along with interest of Rs.27,21,572/- and a penalty of Rs.3,64,864/- without granting an opportunity of personal hearing to the petitioner. Aggrieved by which, the petitioner is before this Court by way of the present petition.

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In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that

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HC-KAR

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though the petitioner had sought for personal hearing in order to put forth his contentions and submit necessary documents, the 2^nd respondent without considering the same, has proceeded to pass the impugned ex-parte order which is violative of the principles of natural justice and the same deserves to be set aside and the 2^nd respondent may be directed to pass fresh order after granting an opportunity of personal hearing to the petitioner. It is further submitted that the impugned proceedings initiated pursuant to the impugned show cause notice dated 26.11.2024 is barred by limitation under Section 73(10) of the KGST Act and as such, the availability of equivalent, efficacious and alternative remedy by way of filing of an appeal under Section 107 of the CGST / KGST Act would not come in the way of the petitioner prosecuting the present petition.

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Per contra, learned HCGP for the respondents – revenue submits that the period of limitation has been extended by the respondents vide Notification No.

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HC-KAR

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13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively and as such, it cannot be said that the proceedings are barred by limitation.

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Learned counsel for the petitioner would invite my attention to the Petition in Special Leave Appeal (C) No. 4240/2025 pending before the Apex Court in order to contend that the validity of the said Notifications are seized by the Apex Court and pending adjudication before the Hon’ble Supreme Court.

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In view of the aforesaid facts and circumstances and the submissions made by both sides which will indicate that the validity of the aforesaid Notifications are seized by the Apex Court and which will have an impact / bearing on the impugned proceedings, I am of the view that one more opportunity is required to be granted in favour of the petitioner by setting aside the impugned adjudication order and remitting the matter back to the

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HC-KAR

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respondents for reconsideration afresh in accordance with law by issuing certain directions.

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Under these circumstances, in order to avoid multiplicity of proceedings and to ensure that there are no conflicting orders, I deem it just and appropriate to direct the 2^nd respondent to reconsider the matter afresh and pass a fresh adjudication order in accordance with law after disposal of Special Leave to Appeal (C)

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No.4240/2025 by the Apex Court.

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In the result, I pass the following:ORDER

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(i) Petition is hereby allowed, subject to payment of

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cost of Rs.5,000/- to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks from today

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(ii) The impugned order at Annexure-B1 dated 18.01.2025 passed by the 2^nd respondent are hereby set aside.

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HC-KAR

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(iii) The matter is remitted back to the 2^nd

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respondent for reconsideration afresh and pass a fresh adjudication order in accordance with law after disposal of SLP No.4240/2025 pending before the Apex Court.

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(iv) The period between the date of the impugned

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order i.e., 18.01.2025 and the date on which the Apex

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Court disposes of the aforesaid SLP No.4240/2025 shall stand excluded for the purpose of limitation.

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Sd/(S.R.KRISHNA KUMAR) JUDGE

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BSV List No.: 2 Sl No.: 14

M/S. Hk Construction v. State of Karnataka

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M/S. Hk Construction v. State of Karnataka

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