Disposed

M/S Concord Construction v. Deputy Commissioner of Commercial Tax (AUDIT-2)

Karnataka HC12 Feb 2025WP/35305/2024

Case brief

AI extract

What is this about?

Writ petitions challenging GST demands were disposed of by quashing the impugned order. The court followed a larger bench ordering reconsideration of these issues in light of the Section 16(5) amendment in the Finance Act 2024, remitting matters back to authorities.

What did the court decide?

Writ petitions disposed; impugned order quashed; matter remitted to authority to show cause regarding Section 16(5) and unblock ITC.

M/S Concord Construction Vs Deputy Commissioner of… — GST and Indirect Tax | Karnataka HC (2025)

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NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 12^TH DAY OF FEBRUARY, 2025

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BEFORE

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THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO.35305 OF 2024 (T-RES)

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C/W

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WRIT PETITION NO.27992 OF 2024 (T-RES)

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IN WP No. 35305/2024

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BETWEEN:

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M/S CONCORD CONSTRUCTION, REGISTERED UNDER INDIAN PARTNERSHIP ACT, 1932, REPRESENTED BY ITS PARTNER, MR. ABDUL SALAM KALLATRA HAVING REGISTERED OFFICE AT A406, CASA GRANDA ATTAVARA, MANGALORE DAVANGERE - 575 001

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…PETITIONER

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Digitally signed by KAVYA R Location: High Court of Karnataka

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(BY SRI. KARTHIK R., ADVOCATE)

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AND:

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DEPUTY COMMISSIONER OF COMMERCIAL TAX (AUDIT-2) 2^ND FLOOR, VANIJYA TERIGE BHAVAN, MAIDAN ROAD, MANGALORE - 575 001

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…RESPONDENT

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(BY SRI. K. HEMAKUMAR, AGA)

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NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED ORDER IN DCA-22/DRC-07/CONCORD/2018-19 DATED 31/10/2023 ISSUED BY THE RESPONDENT I.E,. ANNEXURE-A IN IMPOSING GST UNDER THE HEADS NON DECLARATION OF CONTRACT RECEIPTS IN GSTR-3B AND EXCESS AVAILMENT OF ITC PERTAINING TO ISSUES 1 AND 4 OF THE SAID IMPUGNED ORDER AND TO FURTHER DIRECT THE RESPONDENT NOT TO INITIATE ANY RECOVERY PROCEEDINGS AGAINST THE PETITIONER FOR THESE TWO ISSUES AND ETC.

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IN WP NO. 27992/2024

BETWEEN:

...PETITIONER

(BY SRI. KARTHIK R., ADVOCATE)

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AND:

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DEPUTY COMMISSIONER OF COMMERCIAL TAX (AUDIT-2) 2^ND FLOOR, VANIJYA TERIGE BHAVAN, MAIDAN ROAD, MANGALORE - 575 001

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...RESPONDENT

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NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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(BY SRI. K. HEMAKUMAR, AGA)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER IN DCA-2/DRC-07/CONCORD/2018-19 DTD. 31.10.2023 ISSUED BY THE RESPONDENT i.e., ANNEXURE-B IN IMPOSING GST UNDER REVERSE CHARGE MECHANISM ON THE ROYALTY AMOUNTS DEDUCTED BY THE PWD ON THE PETITIONERS INVOICES AND FOR DENYING THE INPUT TAX CREDITS UNDER SECTION 16(4) OF THE GST ACT 2017 FOR BELATED FILING OF MONTHLY RETURN FOR THE MONTH OF MARCH 2019 AND TO FURTHER DIRECT THE RESPONDENT TO DROP THE DEMAND OF GST ON THE ROYALTY AMOUNTS DEDUCTED FROM THE PETITIONER AND TO GRANT INPUT TAX CREDITS ON THE BELATED FILING OF MONTHLY RETURN FOR MARCH 2019 AND TO GRANT SUCH FURTHER RELIEFS AS THIS HONBLE COURT DEEMS FIT UNDER THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE AND EQUITY AND ETC.

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THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE S.G.PANDIT

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4 - NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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ORAL ORDER

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In the above two writ petitions, the petitioner is before this Court under Article 226 of the Constitution of India, challenging the impugned order bearing No.DCA-2/DRC07/CONCORD/2018-19 dated 31.10.2023 passed under Section 73(9) of the Karnataka Goods and Services Tax Act/the Central Goods and Services Tax Act, 2017 read with Rule-142(5) of the KGST Rules, 2017.

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Both the learned counsels appearing for the petitioner and respondent-Revenue submit that in view of Section 16(5) inserted to the GST Act, 2017, by the Finance Act, 2024, issues with regard to returns not filed within the time, needs re-consideration and in that regard, order dated 03.09.2024 in W.P.No.6138/2020 is placed on record.

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Further, learned Additional Government Advocate would submit that the issue with regard to royalty is also require re-consideration by the Authorities.

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NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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A Co-ordinate Bench of this Court in an identical fact situation in W.P.No.6138/2020 dated 03.09.2024 at Paragraphs-5 and 6 has held as follows:

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"5. As rightly contended by the learned Senior counsel for the petitioner as well as learned counsel for the respondents-revenue and learned AGA for the State, Section 16(5) was inserted into the CGST Act vide Clause 118 of the "The Finance (No.2) Act, 2024", which reads as under:

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"118. In Section 16 of the Central Goods and Services Act, with effect from the 1^st day of July, 2017, after sub-section(4), the following sub-sections shall be inserted, namely:-

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(5) Notwithstanding anything contained in sub-section(4), in respect of an Invoice or Debit note for supply of goods or services or both pertaining to the financial years, 2017-18, 201819, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under Section 39 which is filed up to the thirtieth day of November, 2021.

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(6) xxxxxxxxxxxx

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(i) xxxxxxxxxxxx

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(ii) xxxxxxxxxxxx"

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6. In view of the aforesaid amendment by inserting Section 16(5) to the CGST / KGST Act, the present petition deserves to be disposed of relegating the parties to the original authority to implement and give effect to the said provisions after providing sufficient and reasonable

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6 - NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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opportunity to the petitioner and hearing them and proceed further in accordance with law and by issuing certain directions in this regard."

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5. Following the above, the following:

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ORDER

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(a) Writ petitions stand disposed off ;

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(b) Order bearing No.DCA-2/DRC07/CONCORD/2018-19 dated 31.10.2023 is quashed ;

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(c) The matters are remitted to the stage of showing cause to show-cause notice bearing No.DCCT/Audit-3/GST-33/2022-23 dated 03.03.2023 with reference to Section 16(5) of the CGST/KGST Act, 2017 by providing sufficient opportunity to the petitioner and proceed further in accordance with law. Thereafter, the respondent-Authority is directed to unblock and release credit balance of the petitioner in their ITC Ledger/Account, if not already released.

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NC: 2025:KHC:6445 WP No. 35305 of 2024 C/W WP No. 27992 of 2024

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All contentions of the parties are left open.

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Sd/(S.G.PANDIT) JUDGE

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SMJ List No.: 1 Sl No.: 37

M/S Concord Construction v. Deputy Commissioner of Commercial Tax (AUDIT-2)

Case brief

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What did the court decide?

M/S Concord Construction v. Deputy Commissioner of Commercial Tax (AUDIT-2)

Case brief

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