M/S. Ameena Traders Vs the State of Karnataka

M/S. AMEENA TRADERS NO.39/1,7TH A CROSS, D BLOCK MAGADI ROAD, BANGALORE-560023. REGISTERED UNDER GST ACT, (REPRESENTED BY ITS PRO IYAZ PASHA AGED 38 YEARS

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…PETITIONER

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(BY SRI. K M SHIVAYOGISWAMY., ADVOCATE)

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Digitally signed by VANAMALA N

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Location: HIGH COURT OF KARNATAKA

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AND:

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THE STATE OF KARNATAKA FINANCE DEPARTMENT VIDHANA SOUDHA BENGALURU-560 001.

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THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES,

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LGSTO-070, DGSTO-02, NO.1416/A, 1ST FLOOR, ADICHUCHANGIRI MUTT BUILDING, VIJAYANAGAR, BENGALURU-560040.

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NC: 2026:KHC:30914 WP No. 17759 of 2026

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HC-KAR

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…RESPONDENTS

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(BY SRI. K. HEMA KUMAR, AGA)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT DECLARING THE PROVISIONS OF SECTION 16(2) (C) OF CGST ACT/SGST ACT, 2017 AS BEING ITLEGEL, UNREASONABLE, ARBITRARY AND DISCRIMINATORY AND THEREFORE TO HE STRUCK, DOWN AS VIOLATIVE OF ARTICLE 14, 19 AND 300A; QUASH THE ORDER IN ORIGINAL ISSUED IN FORM GST DRC-07 BEARING NO. ACCT/LGSTO-070/ITC-BLOCK/DRC07/2026-27

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DATED 02.06.2026 PASSED BY THE 2ND RESPONDENT VIDE ANENXURE- C, IN RELATION TO THE FINANCIAL YEAR 2020-21, IN SO FOR AS THE PETITIONER IS CONCERNED, AS THE SAME IS ILLEGAL, WITHOUT AUTHORITY OF LAW, LACK OF JURISDICTION.

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

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CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD

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3 - NC: 2026:KHC:30914 WP No. 17759 of 2026

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HC-KAR

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ORAL ORDER

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The petitioner is aggrieved by the Order dated 02.06.2026 in Form GST DRC-07 [ Annexure – C ] under Section 74 of the Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017 [for short, the 'CGST Act']/KGST Act'] . The petitioner's Input Tax Credit [ITC] is blocked, and the petitioner is called upon to pay tax with interest and penalty for the tax period 2020 - 2021 on the ground that the petitioner's transaction is with a non-existing entity which is not conducting business from the place of registration and is issuing invoices without actual supply of goods.

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2. The petitioner is issued with intimation in DRC-01A on 10.07.2024 and with a Show Cause Notice in Form DRC-01 on 31.01.2026. The petitioner has not responded to the intimation or the notice, and the second respondent has therefore concluded that the petitioner's transactions are with a non-

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NC: 2026:KHC:30914 WP No. 17759 of 2026

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HC-KAR

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existing firm and that the returns are filed based on invoices without the underlying supply.

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3. Mr. K. M. Shivayogiswamy, the learned

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counsel for the petitioner, submits that both the intimation and the Show Cause Notice are only uploaded on the Portal and the petitioner is not served with these, and on merits of the petitioners' grievance, the learned counsel submits that the supplier's registration is cancelled with effect from 01.02.2021 and the petitioner's business with these entities is prior to this as could be seen from the other annexures enclosed to the petition. Crucially, the learned counsel submits that if the petitioner is extended an opportunity, the necessary documents would be filed to justify the genuineness of the transactions.

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4. Mr. K. Hema Kumar, a learned Additional

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Government Advocate who is called upon to accept notice to the respondents, is heard. The question for

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5 - NC: 2026:KHC:30914 WP No. 17759 of 2026

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HC-KAR

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consideration is whether this Court must interfere to extend another opportunity . The petitioner cannot contest that the intimation in Form GST DRC-01A and Show Cause Notice in Form GST DRC-01 were issued on 10.07.2024 and 31.01.2026 respectively but the petitioner has failed to respond and the explanation is that the petitioner is not served with the notices otherwise apart from uploading on the Portal . It is also possible that the intimation is delivered only on the registered E-mail. The petitioner seeks opportunity to produce documents to show the genuineness of the transaction for the period prior to the date of cancellation of the supplier's registration.

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5. In the circumstances, this Court is of the view that there must be interference to extend another opportunity to the petitioner to show cause but on terms which must include deposit of a reasonable amount subject to outcome and the

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NC: 2026:KHC:30914 WP No. 17759 of 2026

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HC-KAR

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timeline within which the documents must be filed.

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In the light of the afore, the following.

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ORDER

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[a] The petition is allowed in-part.

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[b] The impugned order dated 02.06.2026 is quashed restoring the proceedings to the second respondent with liberty to the petitioner to file all documents without further notice by 20.07.2026 .

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[c] The petitioner shall also deposit by this date 10% of the amount in demand subject to the final orders in the restored proceedings including orders on set off if the petitioner succeeds and shows cause against the proceedings under Section 74 of the CGST/KGST Act.

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SD/(B M SHYAM PRASAD) JUDGE

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RB

M/S. Ameena Traders v. the State of Karnataka

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M/S. Ameena Traders v. the State of Karnataka

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