M/S Osman Trading Co. Vs the Joint Commissioner… — Writ and Judicial Review | Karnataka HC (2025)

M/S Osman Trading Co. Vs the Joint Commissioner… — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ of certiorari granted: re-assessment order dated 23.03.2021 (Annexure-B), demand notice dated 23.03.2021 (Annexure-B-1), endorsement dated 20.02.2023 (Annexure-D) and appellate order dated 31.10.2023 (Annexure-F) set aside; matter remitted to respondent No.2 for reconsideration afresh from the stage of reply to notice dated 03.03.2021 (Annexure-A); petitioner to appear before respondent No.2 on 15.12.2025 with liberty to submit replies/documents and entitlement to sufficient and reasonable opportunity; order to stand automatically recalled if the petitioner fails to appear on 15.12.2025.

Issue for consideration

Whether the re-assessment order dated 23.03.2021 under Section 39(1) of the Karnataka Value Added Tax Act, 2003 read with Sections 72(2) and 36(1) (Annexure-B), the demand notice dated 23.03.2021 (Annexure-B-1), the endorsement dated 20.02.2023 (Annexure-D) and the appellate order dated 31.10.2023 (Annexure-F) are liable to be quashed by writ of certiorari. +1 more

Court's answer

The impugned orders dated 23.03.2021, 20.02.2023 and 31.10.2023 passed under Section 39(1) of the Karnataka Value Added Tax Act, 2003 read with Section 72(2) and 36(1) of the KVAT Act, 2003, at Annexures-B, B1, D and F, are set aside.

Ratio / Principle

The petitioner's inability and omission to produce documents in support of his claim was accepted as due to bonafide reasons, unavoidable circumstances and sufficient cause, making it just and appropriate to set aside the impugned orders at Annexures-B, B1, D and F.

Key takeaways

The matter is remitted back to respondent No.2 for reconsideration afresh in accordance with law from the stage of the petitioner submitting its reply to the notice dated 03.03.2021 issued under section 39(1) read with Sections 36(1) and 72(2) of the KVAT Act, 2003 (Annexure-A).ratio¶54
The petitioner is directed to appear before respondent No.2 on 15.12.2025 without awaiting further notice from respondent No.2.ratio¶55
Liberty is reserved to the petitioner to submit replies and documents, which shall be considered by the first respondent, who shall provide sufficient and reasonable opportunity, hear the petitioner and proceed further in accordance with law.

Detailed headnote1 paragraphs

Taxation – Karnataka VAT – Re-assessment under S.39(1) of the Karnataka Value Added Tax Act, 2003 read with Ss.72(2) and 36(1) – Re-assessment order and demand notice dated 23.03.2021 (Annexures-B, B-1), dismissal of rectification application by endorsement dated 20.02.2023 (Annexure-D) and dismissal of appeal by the Joint Commissioner of Commercial Taxes (Appeal)-3 dated 31.10.2023 (Annexure-F) set aside – Petitioner's assertion that relevant and material documents were not available at the time of the impugned proceedings, and that non-production was due to bonafide reasons, unavoidable circumstances and sufficient cause, accepted – Matter remitted to respondent No.2 for reconsideration afresh from the stage of reply to notice dated 03.03.2021 issued under S.39(1) r/w Ss.36(1) and 72(2) KVAT Act (Annexure-A) – Petitioner directed to appear on 15.12.2025 without awaiting further notice, with liberty to submit replies/documents and right to sufficient and reasonable opportunity – Order to stand automatically recalled if petitioner fails to appear on 15.12.2025 – Petition allowed.

NC: 2025:KHC:48565 WP No. 551 of 2025

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HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 24^TH DAY OF NOVEMBER, 2025

BEFORE

THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 551 OF 2025 (T-RES)

BETWEEN:

M/S. OSMAN TRADING CO. REPRESENTED BY M. MUZAFFER AHMED, PROPRIETORSHIP, NO.15, HAINES RAOD, NEAR ABHDUL BARIS SCHOOL SHIVAJINAGAR, BENGALURU - 560 051 (REPRESENTED BY ITS PREOPRITOR M. MUZAFFER AHMED)

…PETITIONER

(BY SRI. E.I. SANMATHI, ADVOCATE)

AND:

Digitally signed by SHARADAVANI B Location: High Court of Karnataka

THE JOINT COMMISSIONER OF COMMERCIAL TAXES,

(APPEAL) 3, BENGALRUU - 560 027.

THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, AUDIT 1.7, DG AND STO-1, 3RD FLOOR, BMTC BUILDING, BANGALORE - 560 022.

THE COMMISSIOERN OF COMMERCIAL TAXES VANIJA THERIGE BHAVANA GAANDINGAR

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BANGALORE - 560 001.

…RESPONDENTS

(BY SMT. JYOTI. M. MARADI, HCGP)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO-QUASH (A) REASSESSMENT ORDER ON 23/3/2021 UNDER SECTION 39(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 READ WITH SECTION 72(2) AND 36 (1) OF THE KVAT ACT, 2003 IN RESPECT OF TIN NO.29270578226 (ANNEXURE B) AND DEMAND NOTICE DATED 23/3/2021 BEARING TIN MO.29270578226 (PRODUCED AS ANNEXURE-B.1) 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, the petitioner has sought for the following reliefs:

Issue Writ of Certiorari or writ in the nature of certiorari quashing the ,

(a) Re-assessment order on 23.03.2021 under Section 39(1) of the Karnataka Value Added Tax Act, 2003 read with Section 72(2) and 36(1) of the KVAT Act, 2003 in respect of TIN No.29270578226 (Annexure

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B) and demand notice dated 23.03.2021 bearing TIN No.29270578226 (produced as Annexure-B-1).

(b) Endorsement dated 20.02.2023 bearing No.ACCT (Audit) - 1.7 / DGSTO 1/T.No.two: 500/2022-23 by the Assistant Commissioner of Commercial Taxes (Audit) 1.7, DGSTO-1, Bengaluru - 560 022 (Annexure D).

(c) Order dated 31.10.2023 passed by the Joint Commissioner of Commercial Taxes (Appeal)-3 Bangalore bearing CAS Order No.393440257 APP T.NO.880/2023-24 (Annexure-F) and to issue any other writ or direction or to grant such other relief or reliefs as deemed fit under the facts and circumstances of this case.

Heard learned counsel appearing for the parties and

perused the material on record.

A perusal of the material on record will indicate that

pursuant to the proceedings initiated by the respondent, the petitioner having contested the said proceedings, the same culminated in an order dated 23.03.2021, pursuant to which the petitioner filed a rectification application, which was also dismissed vide order dated 20.02.2023 and the appeal filed by the petitioner

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also came to be dismissed vide order dated 31.10.2023. In this context, it submitted by the learned counsel for the petitioner that relevant and material documents in support of the claim of the petitioner were not available at the time of the impugned proceedings and the same would be produced by the petitioner if the impugned orders are set aside and the matter remitted back to respondent No.2 - original authority for re-consideration afresh and in accordance with law.

Submission is placed on record.

In view of the specific assertion on the part of the

petitioner that his inability and omission to produce documents in support of his claim was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to set aside the impugned order at Annexure-B, B1, D and F and

remit the matter back to respondent No.2 for re-consideration afresh and in accordance with law.

6. In the result, I pass the following:

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ORDER

(i) The petition is hereby allowed.

(ii) The impugned orders dated 23.03.2021, 20.02.2023 and 31.10.2023 passed by the respondent No.1 under Section 39(1) of the Karnataka Value Added Tax Act, 2003 read with Section 72(2) and 36(1) of the KVAT Act, 2003, at Annexures– B, B1, D and F are hereby set aside.

(iii) The matter is remitted back to the respondent No.2 for reconsideration afresh in accordance with law from the stage of petitioner submitting its reply to the notice dated 03.03.2021 issued under section 39(1) read with Section 36(1) and 72(2) of the KVAT Act, 2003 at Annexure – A.

(iv) The petitioner is directed to appear before the respondent No.2 on 15.12.2025 without awaiting further notice from the respondent No.2.

(v) The 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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(vi) In the event, the Petitioner does not appear before the respondent No.2 on 15.12.2025 as stated supra, present order shall stand automatically recalled without further orders.

Sd/(S.R.KRISHNA KUMAR) JUDGE

SS List No.: 2 Sl No.: 42