M/S Mangalore Internet City Pvt. Ltd. Vs the… — GST and Indirect Tax | Karnataka HC (2026)

M/S Mangalore Internet City Pvt. Ltd. Vs the… — GST and Indirect Tax | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Writ petition disposed of: impugned order-in-original (Annexure-G, dated 30.12.2025) set aside and matter remitted to the authority for reconsideration; all contentions on merits kept open; petitioner to appear before respondent without further notice on 11.05.2026.

Issue for consideration

Whether the findings at para 13 of the order-in-original under Section 74 of the CGST Act appropriately dealt with the petitioner's contention that the transfer of the villa was effected by registered sale deed only after the completion certificate (agreement to sell of 23.07.2018 with part advance; completion certificate of 06.02.2019; sale deed of 29.03.2019), and whether the explanation to Entry-5 of Schedule-II of the CGST Act renders the agreement of sale or the completion certificate conclusive as to transfer of title.

Court's answer

The discussion and findings at para 13 of the impugned order did not deal with the petitioner's contention appropriately; the contentions in the reply to the show cause notice and the scope of interpretation of the explanation to Entry-5 require reconsideration.

Ratio / Principle

The impugned order-in-original at Annexure-G is set aside and the matter is remitted back to the authority for reconsideration, with all contentions on merits kept open; the Authority is to deal in detail with the petitioner's reply to the show cause notice and the legal contentions.

Key takeaways

The petitioner is to appear before the respondent without further notice on 11.05.2026 for the reconsideration proceedings.ratio¶¶41

Detailed headnote1 paragraphs

Oral order, High Court of Karnataka (S Sunil Dutt Yadav, J.), disposing of W.P. 6388/2026 (T-RES): the petitioner challenged the order-in-original under Section 74 of the CGST Act for 2018-19 (Annexure-G, dated 30.12.2025), issued following show cause notice No. 03/2023-24 dated 11.4.2023 (Annexure-E) and the petitioner's detailed reply (Annexure-F), wherein liability was premised on Section 7(2) of the CGST Act read with Entry-5 of Schedule-II. Finding that the discussion and findings at para 13 of the impugned order had not dealt appropriately with the petitioner's contention — that the transfer was effected by registered sale deed only after the completion certificate, and that neither the agreement of sale nor the completion certificate is conclusive per the explanation to Entry-5 of Schedule-II — the Court set aside the impugned order, remitted the matter to the authority for reconsideration with all contentions on merits kept open, and required the petitioner to appear before the respondent without further notice on 11.05.2026.

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NC: 2026:KHC:19326 WP No. 6388 of 2026

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 8^TH DAY OF APRIL, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 6388 OF 2026 (T-RES)

BETWEEN:

M/S MANGALORE INTERNET CITY PVT LTD A COMPANY REGISTERED UNDER THE INDIAN COMPANIES ACT, 1956 HAVING REGISTERED OFFICE AT 10-76/1 MANGAKLORE HILLS PREETHINAGAR SHAKTHINAGAR POST MANGALORE -575 016 REPRESENTED BY ITS GENERAL MANAGER AND AUTHORISED SIGNATORY SRI PRADEEP UPENDRA NAYAK S/O SRI UPENDRA T NAYAK AGED ABOUT 49 YEARS

… PETITIONER

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

(BY SRI. VANI H., ADVOCATE)

AND:

THE SUPERINTENDENT OF CENTRAL TAX OFFICE OF THE SUPERINTENDENT OF CENTRAL TAX YEYYADI RANGE SOUTH DIVISION ROOM NO. 403, 4^TH FLOOR C R BUILDING ATTAVARA MANGALORE -570 001

… RESPONDENT

(BY SRI. ARAVIND V. CHAVAN, ADVOCATE)

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HC-KAR

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO (I) ISSUE A WRIT OF CERTIORARI OR WRIT IN THE NATURE OF CERTIORARI TO QUASH THE IMPUGNED SHOW CAUSE NOTICE BEARING NO. 03/2023-24 DATED 11.4.2023 ISSUED BY THE RESPONDENT UNDER SECTION 74 FOR THE YEAR 2018-19 VIDE ANNEXURE E AND ETC.

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

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

ORAL ORDER

Petitioner has called in question the validity of the order-in-original passed under Section 74 of the CGST Act for the financial year 2018-19 at Annexure-G dated 30.12.2025.

The brief facts that are of relevance for disposal of the petition are that the petitioner is stated to have obtained an approval of plan on 24.08.2011 for development of a residential layout. It is further submitted that construction of a Villa in Plot No. 126 was completed

3 - NC: 2026:KHC:19326 WP No. 6388 of 2026

HC-KAR

on 08.07.2018 and the petitioner had applied for issuance of completion certificate with a competent authority. It is further submitted that the completion certificate was granted on 06.02.2019. In the interregnum, on 23.07.2018 petitioner had entered into an agreement to sell the villa and collected part advance which constituted only part of the sale consideration.

It is submitted that after issuance of completion certificate on 06.02.2019, the petitioner executed the sale deed transferring title of the immovable property in favour of the purchaser on 29.03.2019.

It is stated that the respondent has embarked upon adjudication on the ground that the petitioner is required to be subjected to liability in terms of Section 7(2) of the CGST Act read with Entry-5 of Schedule-II. It is the contention of the petitioner that in response to the show cause notice, detailed reply at Annexure-F had been submitted.

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NC: 2026:KHC:19326 WP No. 6388 of 2026

HC-KAR

Learned counsel for the petitioner submits that

the transfer of property was effected by way of registered sale deed only after the completion certificate and that the agreement of sale cannot be taken to be a conclusive date as transferring title. It is further submitted that though the completion certificate was issued on 06.02.2019, that by itself would not be conclusive in terms of the explanation to Entry-5 of Schedule-II of CGST Act. It is submitted that such aspect has not been taken note of appropriately by the authority and a cryptic reasoning is assigned at para 13 which requires reconsideration. It is submitted that the authority may be directed to reconsider the matter after taking note of the detailed reply and a fresh opportunity may be afforded to place all relevant legal authorities before the authority.

Sri. Aravind Chavan, learned counsel submits that the adjudication is complete and the question raised

by the petitioner is a matter to be canvassed in appeal.

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HC-KAR

Perused the order. The discussion and findings at para 13 of the impugned order insofar as the contention of the petitioner has not been dealt with appropriately. The contentions raised by the petitioner as made out in the reply to the show cause notice as well as the scope of interpretation of explanation to Entry-5 requires reconsideration.

Accordingly, the impugned order at Annexure-G is set aside. The matter is remitted back to the authority for reconsideration. All contentions on merits are kept open. Needless to state, the Authority to deal in detail with the reply of the petitioner to the show cause notice, as well as the legal contentions as made out in the petition that the petitioner states would be canvassed once again before the Authority.

Petitioner to appear before respondent without further notice on 11.05.2026.

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NC: 2026:KHC:19326 WP No. 6388 of 2026

HC-KAR

In light of the above, writ petition is disposed

of .

Sd/(S SUNIL DUTT YADAV) JUDGE

VP