M/S Forest Contractor Vs Union of India — GST and Indirect Tax | Karnataka HC (2025)

M/S Forest Contractor Vs Union of India — GST and Indirect Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed: impugned orders at Annexures E and F dated 18.03.2024 set aside; matter remitted to respondent No.3 for fresh reconsideration in accordance with law bearing in mind Circular No.183/15/2022-GST dated 27.12.2022; petitioner to appear on 28.04.2025 with reply to the show cause notice and documents; further hearing conditional on payment of Rs.10,000/- cost; automatic recall of the order and revival of the petition if the petitioner defaults in appearance.

Issue for consideration

Whether the impugned ex parte adjudication orders dated 18.03.2024 (Annexures E and F) passed by respondent No.3 without the petitioner having replied to the show cause notice deserve to be quashed and the matter remitted for fresh consideration. +1 more

Court's answer

Accepting the petitioner's assertion that his inability to reply to the show cause notice and participate in the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, the Court adopted a justice-oriented approach and afforded the petitioner one more opportunity.

Ratio / Principle

The impugned orders passed by respondent No.3 at Annexure-E and Annexure-F, both dated 18.03.2024, are set aside and the matter is remitted to the respondent for reconsideration afresh in accordance with law.

Key takeaways

On remand, the respondent is to reconsider the matter afresh in accordance with law bearing in mind Circular No.183/15/2022-GST dated 27.12.2022; the petitioner is to appear before the respondent on 28.04.2025 and submit his reply to the show cause notice along with relevant documents.ratio¶47
Upon submission of the reply on 28.04.2025, the respondent shall afford the petitioner a reasonable opportunity of hearing and proceed further in accordance with law, subject to the petitioner paying cost of Rs.10,000/- to the respondent.ratio¶49

Detailed headnote1 paragraphs

High Court of Karnataka (single Judge, S.R. Krishna Kumar), Writ Petition No.6987 of 2025 (T-RES), decided 03.04.2025: Ex parte adjudication orders dated 18.03.2024 (Annexures E and F) passed by the Assistant Commissioner of Commercial Taxes (Vigilance-02) for assessment year 2018-19 under Section 73 of the KGST Act, founded on an alleged difference between GST R-7 and GSTR 3B, were set aside and the matter remanded for fresh consideration. The petitioner had filed no reply to the show cause notice dated 30.01.2024; the Court accepted his assertion that the omission was due to bona fide reasons, unavoidable circumstances and sufficient cause, and adopted a justice-oriented approach granting one more opportunity. Fresh consideration is to bear in mind Circular No.183/15/2022-GST dated 27.12.2022; the petitioner must appear on 28.04.2025 with his reply and relevant documents, and further hearing is subject to payment of Rs.10,000/- as cost. Non-appearance on 28.04.2025 entails automatic recall/cancellation of the order and revival/restoration of the petition without further orders. The merits, including the claim that supply of pure services to the Forest Department is exempt under Notification Nos.11/2017 and 12/2017 Central Tax (Rate) dated 28.06.2017, were left open.

NC: 2025:KHC:14273 WP No. 6987 of 2025

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3^RD DAY OF APRIL, 2025

BEFORE

THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.6987 OF 2025 (T-RES)

BETWEEN:

M/S.FOREST CONTRACTOR DOOR NO.413, 3^RD CROSS O P O ROAD CHICKABALLAPUR - 562101 (REPRESENTED BY ITS PROPRIETOR SRI.BURUDAGUNTE FAKRUDDINSAB MOHAMMAD HANEEF)

…PETITIONER

(BY SRI.APRAMEYA K, ADVOCATE FOR SRI.ATUL KRISHNA RAO ALUR)

AND:

Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATAKA

UNION OF INDIA THROUGH ITS SECRETARY (REVENUE) MINISTRY OF FINANCE DEPARTMENT OF REVENUE GOVERNMENT OF INDIA NORTH BLOCK NEW DELHI - 110 001

THE STATE OF KARNATAKA REPRESENTED BY THE PRINCIPAL SECRETARY FINANCE DEPARTMENT GOVERNMENT OF KARNATAKA BENGALURU - 560 001

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NC: 2025:KHC:14273 WP No. 6987 of 2025

ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (VIGILANCE-02) V FLOOR, A BLOCK ROOM NO.504, V.T.K.-2 BUILDING KORAMANGALA BENGALURU - 560047.

…RESPONDENTS

(BY SRI.MADANAN PILLAI, ADVOCATE FOR R.1; SRI.HEMAKUMAR K, AGA FOR R.2 AND R.3)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ADJUDICATION PASSED BY THE RESPONDENT NO.3 BEARING NO MA290324073362X DATED 18/3/2024 AT ANEEXURE-E FOR THE ASSESSMENT YEAR 2018-19 IN SO FOR AS THE PETITIONER IS CONCERNED AND ETC.

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

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

ORAL ORDER

In this writ petition, the petitioner seeks the following reliefs:

"i) Issue a writ of certiorari, or Writ of Certiorari quashing the impugned adjudication passed by the respondent No.3 bearing No.MA290324073362X dated 18.03.2024 at Annexure-E for the assessment year 201819 in so far as the petitioner is concerned.

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NC: 2025:KHC:14273 WP No. 6987 of 2025

ii) Issue a writ of certiorari, or writ of certiorari quashing the impugned issued by respondent No.3 bearing No:JCCT(VIG)/ACCT/(VIG)-02/INS1446/2023-24 dated 18.03.2024 at Annexure-F for the assessment year 201819 in so far as the petitioner is concerned.

iii) Issue writ or declaration or writ in the nature of the declaration declaring that supply of pure services to the Forest Department is exempted from payment of KGST/CGST Act, as per the Notification No.11/2017 Central Tax (Rate) dated 28.06.2017 as per Annexure-H in so far as the petitioner is concerned.

iv) Issue writ or declaration or writ in the nature of the declaration declaring that supply of pure services to the Forest Department is exempted from payment of KGST/CGST Act, as per the Notification No.12/2017 Central Tax (Rate) dated 28.06.2017 as per Annexure-J in so far as the petitioner is concerned.

v) Issue any other writ or directions deemed fit, in the facts and circumstances of the case, including the cost of the Writ Petition, in the interest of justice and equity."

Heard the learned counsel for the petitioner, the learned counsel for respondent No.1 and Additional Government Advocate for respondent Nos.2 and 3 and perused the material on record.

A perusal of the material on record would indicate that respondent No.3 received an information stating that there is

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difference between the GST R-7 and GSTR 3B. On 20.01.2024, the respondent No.3 issued intimation in DRC 01A under Section 73 of the KGST Act, calling for explanation as to the difference/discrepancy between the GST R-7 and GSTR 3B. Pursuant to the same, the respondent issued show cause notice dated 30.01.2024 to the petitioner, who did not submit any reply to the same and consequently, the respondent proceeded to pass the impugned orders at Annexure-E and Annexure-F both dated 18.03.2024, which are assailed in the present petition.

Learned counsel for the petitioner submits that due to bona fide reasons and unavoidable circumstances and sufficient cause, the petitioner could not submit his reply to the show cause notice and the impugned ex-parte orders deserve to be quashed and the matter is remitted back to the respondents for reconsideration of the matter afresh in accordance with law by providing an opportunity to the petitioner to submit a reply to the show cause notice and thereafter to pass appropriate orders. It is also submitted that the impugned orders are vitiated on account of non-consideration of the Circular issued by the Central Government, Government of India, bearing No.183/15/2022-GST

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NC: 2025:KHC:14273 WP No. 6987 of 2025

dated 27.12.2022. It is therefore submitted that the impugned orders deserve to be quashed.

Per contra , learned Additional Government Advocate for respondent would support the impugned orders and submit that there is no merit in the petition and the same is liable to be dismissed, especially when the petitioner did not exercise his due diligence in participating in the impugned proceedings.

A perusal of the material on record including the impugned orders will indicate that it is an undisputed fact that the petitioner did not respond/reply to the show cause notice and the impugned ex-parte orders have been passed without hearing the petitioner. Under these circumstances, in view of the specific assertion on the part of the petitioner that his inability and omission to submit the reply to the show cause notice and participate in the proceedings was due to bona fide reasons, unavoidable circumstances and sufficient cause, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner, I deem it just and appropriate to set aside the impugned orders and remit the matter back to the respondent for reconsideration afresh in accordance with law by issuing certain directions.

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In the result, I pass the following:

ORDER

i) The Writ Petition is allowed ;

ii) The impugned orders passed by respondent No.3 at Annexure-E and Annexure - F both dated 18.03.2024, are hereby set aside;

iii) The matter is remitted back to the respondent for reconsideration afresh in accordance with law, bearing in mind the aforesaid Circular bearing No.183/15/2022-GST dated 27.12.2022;

iv) The petitioner shall appear before the respondent on 28.04.2025 on which date, he shall submit his reply to the show cause notice along with relevant documents.

v) Upon the petitioner submitting a reply along with relevant documents to the show cause notice, on 28.04.2025, the respondent shall afford a reasonable opportunity to the petitioner and hear him and proceed further in accordance with law subject to the petitioner paying cost of Rs.10,000/- to the respondent.

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vi) It is further made clear that in the event petitioner does not appear on 28.04.2025, the present order shall stand automatically recalled/cancelled and the present petition shall stand revived/ restored without further orders and without reference to the Bench.

Sd/(S.R.KRISHNA KUMAR) JUDGE

NBM

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