M/S Bhawar Life Style Vs Assistant Commissioner… — Writ and Judicial Review | Karnataka HC (2026)

M/S Bhawar Life Style Vs Assistant Commissioner… — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

The Orders-in-Original at Annexure-A in both W.P. No. 1664/2026 (TRAN-1 rejection dated 05.02.2025) and W.P. No. 1729/2026 (TRAN-2 rejection dated 30.01.2025) are set aside; the matters are remanded to the Assessing Authority for fresh consideration with all contentions kept open.

Issue for consideration

Whether the Order-in-Original dated 05.02.2025 rejecting the petitioner's TRAN-1 credit for the period July 2017 to March 2022 (W.P. No. 1664/2026) should be set aside. +2 more

Ratio / Principle

Since the assessee is common to both matters, the two writ petitions were clubbed and disposed of by a common order.

Key takeaways

Because the impugned orders were passed in the absence of certain documents not placed before the authorities, and the petitioner has now placed records before the Assessing Authority (which in turn sought CA certified closing stock as on 30.06.2017, purchase invoice copies and the sales register for July to December 2017), it was appropriate to set aside the impugned orders and remit the matters for reconsideration.ratio¶72
The order at Annexure-A in both W.P. No. 1664/2026 and W.P. No. 1729/2026 is set aside; both matters are remanded for fresh consideration and all contentions are kept open.ratio¶74

Detailed headnote1 paragraphs

GST - Transitional credit - Rejection of TRAN-1 and TRAN-2 - Assessee (common in both matters) challenged, under Articles 226 and 227 of the Constitution of India, two Orders-in-Original of the Assistant Commissioner of Central Tax, South Division-3, Bangalore: one dated 05.02.2025 (OIO Sl. No. 138/202425/GST/AC) rejecting TRAN-1, and one dated 30.01.2025 (OIO Sl. No. 114/2024-25/GST/AC) rejecting TRAN-2, both for the period July 2017 to March 2022 - The TRAN-1 rejection rested on mismatch of quantity/value of inputs with the TRAN credit availed and non-maintenance of a detailed stock register; the TRAN-2 rejection rested on non-furnishing of details of inputs held in stock as on 1st July and non-production of invoices evidencing tax carried forward to the Electronic Credit Ledger - By interim order dated 04.02.2026 the court remitted the matter to respondent No.1, with the petitioner to appear on 25.02.2026 to demonstrate bona fides - The petitioner appeared, filed a memo enclosing documents not previously produced, and the Assessing Officer called for CA certified closing stock as on 30.06.2017, purchase invoice copies and the sales register for July to December 2017 - Holding that the impugned orders were passed in the absence of certain documents and that records had since been placed, the court set aside the order at Annexure-A in both writ petitions, remanded the matters for fresh consideration, kept all contentions open, and disposed of both petitions by common order (S Sunil Dutt Yadav, J.; decision dated 04.03.2026).

1 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 4^TH DAY OF MARCH, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 1664 OF 2026 (T-RES) C/W WRIT PETITION NO. 1729 OF 2026 (T-RES)

IN W.P. No. 1664/2026

BETWEEN:

M/S BHAWAR LIFE STYLE NO. 91, MODEL HOUSE STREET BASAVANGUDI (REPRESENTED BY ITS PROPRIETOR SUNIL KUMAR)

… PETITIONER

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

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

AND:

ASSISTANT COMMISSIONER CENTRAL TAX SOUTH DIVISION -3 BANGALORE SOUTH COMMISSIONERATE 1^ST FLOOR BMTC BUILDING KANAKPURAROAD BANASHANKARI BENGALURU - 560 070

THE COMMISSIONER OF CENTRAL TAX SOUTH COMMISIONERATE POST BOX NO. 5400

2 -

NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

QUEENS ROAD BANGALORE - 1

… RESPONDENTS

(BY SRI. ARAVIND V. CHAVAN, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER IN ORIGINAL BEARING DIN NO.20250257 00000000FC02 DATED 5/2/2025 AND OIO SI. NO. 138/202425/GST/AC VIDE ANNEXURE-A (REMAND) FOR PERIOD JULY 2017 TO MARCH 2022 PASSED BY THE ASSISTANT COMMISSIONER OF CENTRAL TAX, SOUTH DIVISION-3, I FLOOR, BANGALORE (REJECTION OF TRAN-1) AND THIS HON'BLE HIGH COURT MAY BE PLEASED TO ISSUE SUCH OTHER WRIT OR WRITS OR DIRECTIONS IN THE NATURE OF A WRIT AS THIS HON'BLE HIGH COURT MAY DEEM IT FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE PETITIONER'S CASE AND ETC.

IN W.P. NO. 1729/2026

BETWEEN:

M/S BHAWAR LIFE STYLE NO. 91, MODEL HOUSE STREET BASAVANGUDI (REPRESENTED BY ITS PROPRIETOR SUNIL KUMAR)

... PETITIONER

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

3 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

AND:

ASSISTANT COMMISSIONER OF CENTRAL TAX SOUTH DIVISION 3 1^ST FLOOR, BENGALURU SOUTH COMMISSIONERATE BMTC BUILDING, BANASHANKARI BANGALORE - 560 070

THE COMMISSIONER OF CENTRAL TAX SOUTH DIVISION BENGALURU SOUTH COMMISSIONERATE BMTC BUILDING, BANASHANKARAI BANGALORE - 560 070 BANGALORE

... RESPONDENTS

(BY SRI. UNNIKRISHNAN M., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE COPY OF ORDER IN ORIGINAL BEARING DIN NO.202501570000003303EC DTD 30.01.2025 AND OIO SI.NO. 114/2024-25/GST/AC FOR PERIOD JULY 2017 TO MARCH 2022 PASSED BY THE ASSISTANT COMMISSIONER OF CENTRAL TAX, SOUTH DIVISION-3, I FLOOR, BANGALORE (REJECTION OF TRAN-2) (ANNEXURE-A) AND THIS HON'BLE HIGH COURT MAY BE PLEASED TO ISSUE SUCH OTHER WRIT OR WRITS OR DIRECTIONS IN THE NATURE OF A WRIT AS THIS HON'BLE HIGH COURT MAY DEEM IT FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE PETITIONER'S CASE AND ETC.

4 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

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

CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

W.P.No.1664/2026 is filed seeking for setting aside

of the Order-in-Original dated 05.02.2025 for the period from July 2017 to March 2022 challenging the rejection of Tran-1.

W.P.No.1729/2026 is filed by the same assessee

calling in question the Order-in-Original dated 30.01.2025 for the period from July 2017 to March 2022 assailing the rejection of Tran-2.

Taking note that assessee is common in both the matters, it would be appropriate to club both the writ petitions and dispose of the same by a common order.

Insofar as rejection of Tran-1 is concerned, the Adjudicating Authority had made certain observations at

5 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

para 14 to the effect that the quantity and value inputs are not matching with the TRAN credit availed. It is also noticed that the petitioner has not maintained detailed stock register showing the quantity of goods in stock, description of goods, quantity of each item and value of the stock on hand etc. It was further held that, as tax credit availed by the tax payer was irregular, the demand was confirmed.

Insofar as rejection of Tran-2 is concerned, which is the subject matter in W.P.No.1729/2026, the Order-in-Original would observe that the tax payer has not furnished details of inputs held on stock as on 1^st July and it was further pointed out that invoice/documents evidencing payment of tax carried forward to Electronic Credit Ledger in support of that credit availed was not produced.

Taking note of the observations made in the Order-in-Original, this court on 04.02.2026 has passed the following order:

NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

6 -

"The petitioner in both the cases contends that the Authority has not taken note of the documents produced by the petitioner referred to at Annexure-'E' and has merely asserted that the Value of Inputs are not matching with the TRAN Credit availed.

It is further submitted that the documents referred to in the E-mail at Annexure-'E' to record a finding on mismatch regarding TRAN Credit availed and the petitioner would demonstrate the same.

In light of the above submission and to demonstrate the bona fides of the petitioner, the matter is remitted to respondent No.1.

The petitioner is to appear before the respondent No.1 on 25.02.2026 and satisfy the Authority regarding the availability of material.

Learned counsel appearing for the Revenue to obtain instructions as to whether the petitioner has produced relevant material before the Authorities.

The petitioner is at liberty to furnish the materials and records apart from those referred at Annexure-'E' which would enable the petitioner to demonstrate mismatching the Value of TRAN Credit availed.

7 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

Re-list the matter on 04.03.2026."

Learned counsel for petitioner submits that he has appeared before the authority and has filed a memo enclosing copy of the documents produced before the Assessing Officer as well as enclosing copy of the minutes regarding the proceedings of 25.02.2026.

The above would reveal that the petitioner has placed before the Assessing Officer, details as referred in the order impugned, which was not previously produced.

Taking note of the documents produced, the Assessing Officer has called upon the petitioner to produce the CA certified closing stock of goods as on 30.06.2017, purchase invoice copies and sales register for the period July to December, 2017.

Learned counsel for Revenue affirms the

proceedings held on 25.02.2026.

8 - NC: 2026:KHC:13267 WP No. 1664 of 2026 C/W WP No. 1729 of 2026

HC-KAR

Taking note of the orders passed in the absence

of certain documents not having been placed before the authorities and now placing certain records and the Adjudicating Authority has sought for certain certified copies to be produced, it would be appropriate to set aside the impugned order and remit the matter for

reconsideration.

Accordingly, the order at Annexure-A in W.P.No.1664/2026 and W.P.No.1729/2026 is set aside. The matters are remanded for fresh consideration. All contentions are kept open.

Accordingly, both W.P.No.1664/2026 and

W.P.No.1729/2026 are disposed of.

Sd/(S SUNIL DUTT YADAV) JUDGE

NP