M/S Hind Metals Vs Joint Commissioner of Commercial — GST and Indirect Tax | Karnataka HC (2026)

M/S Hind Metals Vs Joint Commissioner of Commercial — GST and Indirect Tax | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Impugned appellate order dated 19.03.2025 set aside; matter remitted to Respondent No.1 (Joint Commissioner) for fresh consideration on merits after affording reasonable opportunity of hearing; petitioner directed to appear before Respondent No.1 on 09.02.2026; Respondent No.1 to conclude proceedings within six [6] weeks; petitioner at liberty to file additional documents; all contentions of both parties kept open.

Issue for consideration

Whether the appellate authority discharged its statutory obligation under Section 107 of the KGST Act by considering the written submissions and documents placed on record before dismissing the appeal. +2 more

Court's answer

The material on record disclosed that the appellant had in fact placed written arguments and documentary material in support of its case, and these had been acknowledged by the authority.

Ratio / Principle

Although the appellate authority recorded that an opportunity of hearing was granted, the impugned appellate order proceeded on the erroneous premise that the appellant had neither appeared nor filed written arguments.

Key takeaways

The impugned appellate order did not satisfy the statutory requirements of Sections 107(11) and 107(12) of the KGST Act, namely independent examination of the appeal on merits and a written order stating the point(s) for consideration, the decision thereon and the reasons for the decision.ratio¶7
The appellate order was a non-speaking order passed without independent application of mind to the grounds urged in the appeal.ratio¶8
The writ petition being allowed in part, the impugned appellate order dated 19.03.2025 passed by the Joint Commissioner of Commercial Taxes, Dharwad Division, was set aside.

Detailed headnote1 paragraphs

Karnataka High Court (Dharwad Bench), K.S. Hemalekha J., W.P. No. 105452 of 2025 (T-RES), decided 19.01.2026: M/s Hind Metals, a registered GST dealer in scrap and copper wastage, whose Input Tax Credit was disallowed with differential tax, interest and penalty confirmed on 30.07.2024 under Section 74 of the KGST Act, and whose statutory appeal was dismissed on 19.03.2025 by the Joint Commissioner under Section 107(11) of the KGST/GST Act, challenged both orders. Held: the appellate order, though recording grant of an opportunity of hearing, wrongly premised that the appellant had neither appeared nor filed written arguments, whereas written arguments and documents were on record and acknowledged; the order failed the statutory mandates of Sections 107(11) and 107(12) requiring independent merits-examination and a reasoned written order, and was a non-speaking order lacking independent application of mind. Writ petition allowed in part: appellate order dated 19.03.2025 set aside and matter remanded to Respondent No.1 for fresh decision on merits with a fresh hearing; petitioner to appear on 09.02.2026; disposal within six weeks; additional documents permitted; all contentions kept open.

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IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 19^TH DAY OF JANUARY 2026 BEFORE

THE HON'BLE MRS JUSTICE K.S.HEMALEKHA WRIT PETITION NO. 105452 OF 2025 (T-RES)

BETWEEN:

M/S HIND METALS INDUSTRIAL ESTATES CITB PLOT NO.39, RAVINAGAR, 5^TH CROSS, FIRST FLOOR, GOKUL ROAD, HUBLI, DHARWAD DIST: 580030, GST NO. 29AFUPA9806RIZE PROPRIETARY CONCERN, REPRESENTED BY ITS PROPRIETOR, MR. R. SIKANDAR BASHA.

…PETITIONER

(BY SMT. VEENA J.KAMATH, ADVOCATE (THROUGH VC))

AND:

JOINT COMMISSIONER OF COMMERCIAL TAXES, (APPEALS) DHARWAD DIVISION, VTK BUILDING, NAVANAGAR, HUBBALI, DHARWAD DIST: 580025.

MANJANNA E

Digitally signed by MANJANNA E Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2026.01.29 10:13:33 +0530

ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (ENFORCEMENT)-3, VTK BUILDING, NAVANAGAR, HUBBALLI, DHARWAD DIST: 580025.

…RESPONDENTS

(BY SRI. PRAVEEN K.UPPAR, AGA)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 19.03.2025 BEARING APPEAL NO. APL/GST286/2024-25 UNDER SECTION 107(11) OF THE GST ACT, 2017 PASSED BY THE 1^ST RESPONDENT AT ANNEXURE-A, AND ALSO THE ORDER DATED 30.07.2024 IN FORM DRC-07 BEARING REFERENCE NO. ACCT/ENF-3/HUBBALLI/2024-25 OF THE 2^ND RESPONDENT UNDER SECTION 74(9) AND 74(10) OF THE GST ACT AS PER ANNEXURE-A1 BY ISSUING A WRIT OF CERTIORARI OR ANY OTHER ORDER IN THE NATURE A WRIT OF CERTIORARI AND ETC.

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

CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA

ORAL ORDER

Petitioner-M/s. Hind Metals have approached this

Court challenging:

i) appellate order dated 19.03.2025 passed by the

Joint Commissioner under Section 107(11) of the

Karnataka Goods Services Tax Act, 2017 ( for short, ‘KGST Act’ ) and

ii) the adjudication order dated 30.07.2024 passed by

the Assistant Commissioner under Sections 74(9) and 74(10) of the KGST Act, whereby the Income

Tax Credit ( for short, ‘ITC’ ) was disallowed and

differential tax, interest and penalty were levied.

2. Brief facts ;

The petitioner is a registered GST dealer, engaged in

the business of scrap and copper wastage. Inspections were

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held alleging that certain suppliers were “bogus, nonexisting” leading to a proceedings under Section 74 of the KGST Act. Show-cause notice was issued, to which the petitioner replied asserting genuine purchases with valid invoices, weigh bills, receipt of goods and banking payments. It is stated that the adjudicating authority confirmed demand on 30.07.2024 and the statutory appeal was dismissed on 19.03.2025.

Learned counsel for the petitioner submits that the appellate authority has failed to discharge its statutory obligation under Section 107 of the KGST Act in as much as the appeal has been dismissed without consideration of the written submission and documents placed on record. It is submitted that Section 107(11) read with 107(12) of the KGST Act mandates a reasoned order, framing points for consideration and recording findings thereon which is conspicuously absent in the impugned appellate order. 4. Learned counsel further submits that the appellate authority has proceeded on an erroneous

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assumption that the petitioner neither appeared nor filed written arguments, whereas the records demonstrates otherwise. The impugned order, therefore suffers from non application of mind and violation of principles of natural justice.

Per contra , learned Additional Government

Advocate appearing for the respondents-State sought to

justify the impugned order and contended that adequate opportunity was accorded to the petitioner and that in the absence of effective participation, the appellate authority was justified in confirming the adjudication order.

This Court has carefully considered the

contention urged and perused the impugned appellate order dated 19.03.2025 passed by the Joint Commissioner of Commercial Taxes, Dharwad Division. Though, the appellate authority records that an opportunity of hearing was granted, the order proceeds on an erroneous premise that

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the appellant had neither appeared nor filed their written arguments.

The material on record clearly discloses that the appellant had placed written arguments and documentary material in support of it’s case and the same had been acknowledged by the authority. Section 107(11) of the KGST Act mandates that the appellate authority to independently examine the appeal on merits, and Section 107(12) of the KGST Act mandates the appellate order shall be in writing, stating the point for consideration, the decision thereon and the reasons for such decision. The impugned order has not satisfied these statutory requirements.

The appellate order is thus a non speaking order passed without independent application of mind to the grounds urged in the appeal. Accordingly, this Court pass the following;

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ORDER

i) The Writ Petition is allowed in part .

ii) The impugned order dated 19.03.2025 passed by the Joint Commissioner of Commercial Taxes, Dharwad Division, is hereby set aside .

iii) The matter is remitted back to the respondent No.1 for fresh consideration on merits in accordance with law, after affording the petitioner a reasonable opportunity of hearing.

iv) The petitioner shall appear before the respondent No.1 on 09.02.2026 .

v) All contentions of both parties are kept open.

vi) The respondent No.1 shall conclude the proceedings as expeditiously as

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possible not more than a period of six [6] weeks.

vii) The petitioner is also at liberty to file additional documents in support of their

contentions, if any.

Sd/JUSTICE K.S.HEMALEKHA

PJ/ Ct:VH List No.: 1 Sl No.: 6