M/S S Balan Building Division Vs the Assistant Commissioner of Commercial Taxes.

M/S S BALAN BUILDING DIVISION NO. 13/3, GD CORNWELL CLASSIC CORNWELL ROAD LANGFORD TOWN BENGALURU 560 025 REPRESENTED BY ITS ACCOUNTS MANAGER K HANUMANTHA REDDY.

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…PETITIONER

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(BY SRI. NARAYAN M.R., ADVOCATE)

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AND:

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Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

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THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES., LGSTO-040 ROOM NO. 628, 6^TH FLOOR BMTC COMPLEX 6^TH BLOCK, KORAMANGALA BENGALURU 560 095.

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…RESPONDENT

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(BY SRI.SHAMANTH NAIK., HCGP)

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NC: 2026:KHC:27168 WP No. 2136 of 2026

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HC-KAR

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THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO-DIRECTION OF APPROPRIATE NATURE AND DECLARE THAT THE IMPUGNED ORDER DATED 23.12.2025 BEARING ZD2912251786043 PASSED UNDER SECTION 73 GST ACT 2017, DEMANDING TAX, PENALTY AND INTEREST OF RS. 28,22,530/-FOR THE TAX PERIOD APRIL 2021 TO MARCH 2022, I.E., ANNEXURE A IS NULL AND VOID AND NOT SUSTAINABLE IN LAW.

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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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ORAL ORDER

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The petitioner, who is into construction, has called in question the Order of Adjudication dated 23.12.2025 under Section 73 of the Central Goods and Services Tax Act/Karnataka Goods and Services Tax Act, 2017. On the previous date of hearing [ on 04.06.2026 ] when this petition was listed, Sri M R Narayan, the learned counsel for the petitioner, had pointed out that only a summary of the order is uploaded on the website without a reasoned order.

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NC: 2026:KHC:27168 WP No. 2136 of 2026

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HC-KAR

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Therefore, this Court has called upon Sri Shamanth Naik, a learned High Court Government Pleader who was called upon to accept notice for the respondent, to secure instructions reserving liberty to the learned counsel for the petitioner to seek interim order.

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Sri Shamanth Naik places on record copies of certain documents to assert that [a] a detailed Order of Adjudication is passed on 23.12.2025 and [b] this Order is also uploaded on the portal, but there is some controversy in this regard with Sri M R Narayan contesting the same. This Court must, independent of this controversy, consider whether the petitioner has made out a case for interference under Article 226 of the Constitution of India.

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Sri M R Narayan submits that the petitioner has filed reply on three different occasions on 05.11.2025, 08.12.2025 and 17.12.2025. The respondent has referred to the Reply dated

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NC: 2026:KHC:27168 WP No. 2136 of 2026

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HC-KAR

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06.12.2025 but not to the other three replies, and even otherwise, the respondent has only recorded the reasons offered by the petitioner against a liability without reasoning why such grounds must not be accepted. In this regard, Sri M R Narayan submits, as stated in the reply, that [a] the petitioner does not undertake any construction for on behalf of any potential buyer and hence no advances are received, [b] the petitioner undertakes construction on its own account and the constructed units are sold only after the concerned authorities issue Occupancy Certificates, [c] the petitioner claims Input Tax Credit and files the application in GSTR-3B to meet the unlikely contingency of having to sell units during the construction, and [d] once the construction is completed, their entries are reversed.

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4. Sri Shamanth Naik cannot dispute that

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the respondent has referred to the Reply dated 06.12.2025 but extracted the Reply 05.11.2025 and

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NC: 2026:KHC:27168 WP No. 2136 of 2026

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HC-KAR

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that the authority has passed the impugned Order of Adjudication dated 23.12.2025 without reasoning the consequence of the practice that the petitioner relies upon and the liability that could be. This Court is of the view that lack of application of mind is writ large, and therefore, there must be interference with the impugned Order of Adjudication restoring the proceedings for reconsideration.

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At this stage, Sri Shamanth Naik submits that this Court may consider that the petitioner could raise the question of limitation without availing the appellate remedy, and in response, Sri M R Narayan submits that the petitioner who is confident of succeeding on the merits will not raise the ground of limitation in the peculiarities of the case. Hence the following.

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ORDER

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[a] The petition is allowed in part.

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NC: 2026:KHC:27168 WP No. 2136 of 2026

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HC-KAR

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[b] The Order of Adjudication dated 23.12.2025 [Annexure-A] is quashed restoring the proceedings to the respondent for due adjudication reserving liberty to the petitioner to file a copy of this order along with all the replies that are filed directing the respondent to consider the same and pass a reasoned order observing that the petitioner will not be entitled to raise the ground of limitation.

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[c] The petitioner shall file the additional reply and a certified copy of this order within two [2] weeks from the date of receipt of copy of this order.

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[d] It is needless to observe that there cannot be any precipitous action after the intervention under this order unless there is a fresh adjudication,

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