Sri Krishna Raghavendra Hari Kandili Vs the Union… — Writ and Judicial Review | Karnataka HC (2026)

Sri Krishna Raghavendra Hari Kandili Vs the Union… — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Impugned order-in-original (Annexure-E, OIO No.223/2023-24 dated 08/3/2024) set aside; matter remitted to the stage of reply to the show cause notice with directions to follow the observations in W.P.No.11154/2023 dated 03.07.2024 (para 10); copy of show cause notice to be furnished to petitioner; petitioner free to file fresh reply and to appear before respondent No.3 on 21.04.2026 without waiting for notice; authorities to recall advice regarding attachment of bank account forthwith; all contentions kept open.

Issue for consideration

Whether the order-in-original at Annexure-E passed by respondent No.3 (raising a service tax demand on the basis of CBDT/income-tax return inputs) should be quashed and set aside. +2 more

Court's answer

Taking note of the earlier order in W.P.No.11154/2023 dated 03.07.2024, the order-in-original at Annexure-E is set aside and the matter is remitted to the stage of reply to the show cause notice; the authorities are to take note of the observations in para 10 of that order as may be applicable.

Ratio / Principle

In light of the assertion that the show cause notice was not served, the authorities are to furnish a copy of the same to the petitioner.

Key takeaways

The petitioner is at liberty to make out a fresh reply to the show cause notice and to appear before respondent No.3 on 21.04.2026 without waiting for any notice.ratio¶85
In light of the setting aside of the order-in-original, the authorities are to recall their advice regarding attachment of the bank account forthwith; all contentions are kept open.ratio¶87

Detailed headnote1 paragraphs

Service tax - Order-in-original No.223/2023-24 dated 08.03.2024 passed by the Assistant Commissioner of Central Tax (respondent No.3) on the basis of inputs received from CBDT - Writ petition under Articles 226 and 227 of the Constitution seeking certiorari - Held: order-in-original set aside and matter remitted to the stage of reply to the show cause notice, in terms of the Court's order dated 03.07.2024 in W.P.No.11154/2023; officers to keep in mind (i) applicability of Section 65B(44) of the Finance Act, 1994, (ii) coverage under the negative list, (iii) exemption under Notification No.25/2012-ST dated 28.06.2012, (iv) liability under Rule 2 (1) (d) read with applicable notification, and (v) limitation in terms of the law laid down by the Apex Court - Copy of show cause notice to be furnished to petitioner; fresh reply permitted; petitioner to appear before respondent No.3 on 21.04.2026 without waiting for notice - Advice regarding attachment of bank account to be recalled forthwith - All contentions kept open - Petition disposed of.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 24^TH DAY OF MARCH, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 7315 OF 2026 (T-RES)

BETWEEN:

SRI KRISHNA RAGHAVENDRA HARI KANDILI S/O SREENIVASA MURTHY K AGED ABOUT 52 YEARS RESIDING AT FLAT NO. 203 SAI SHAKTHI RESIDENCY 1ST MAIN, 3RD CROSS NEAR ABBAIAH STUDIO NAIDU LAYOUT AREHALLY, BENGALURU-560 061.

…PETITIONER

(BY SRI. SURYA KANTH C S.,ADVOCATE)

AND:

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

THE UNION OF INDIA THROUGH ITS SECRETARY, (REVENUE) MINISTRY OF FINANCE DEPARTMENT OF REVENUE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI 110 001.

THE PRINCIPAL CHIEF COMMISSIONER OF CENTRAL TAX, BENGALURU SOUTH COMMISSIONERATE, CR BUILDING QUEENS ROAD, BENGALURU 560 001.

THE ASSISTANT COMMISSIONER OF CENTRAL TAX, WEST DIVISION 6 BENGALURU WEST COMMISSIONERATE 1ST FLOOR, TTMC COMPLEX

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BMTC BUS STAND, BANASHANKARI BENGALURU-560 070.

…RESPONDENTS

(BY SRI. ARAVIND V CHAVAN., ADVOCATE)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI, OR WRIT OF CERTIORARI QUASHING THE IMPUGNED OIO NO.223/2023-24 DATE OF PASSING-08/3/2024 AT ANNEXURE-E PASSED BY THE THIRD RESPONDENT AND ETC.,

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

Sri. Aravind V. Chavan, learned counsel accepts

notice for respondents.

Petitioner has called in question the correctness of the order-in-original at Annexure-E passed by respondent No.3.

Learned counsel for the petitioner submits that the adjudication culminating in demand for service tax is on the basis of inputs received from CBDT. It is submitted that in an identical circumstance where service tax demand has been raised pursuant to adjudication on the

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basis of information available under the income tax returns, the Courts have been setting aside orders and remitting matters for fresh consideration taking note of observations made in W.P.No.11154/2023.

It is submitted that the order passed is an ex-

parte order and there was no communication of notice. It is further submitted that the quantification of liability is also a matter to be demonstrated before the Authority and accordingly requests for setting aside of the order in original.

Perused the order dated 03.07.2024 passed in

W.P.No.11154/2023 and connected petitions.

This Court while disposing of the said petitions by remanding it to the stage of reply to the show cause notice had made certain observations to be kept in mind by the concerned officials. The observations made from para-10 onwards reads as follows:-

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"10. The officers while disposing off the petitions to keep in mind the following:

1) Whether petitioners do not qualify under Section 65B(44) of the Finance Act, 1994 ?

2) Whether services are covered under negative list ?

3) Whether services are covered under the exemption list under the Notification No.25/2012-ST dated 28.06.2012 or under any other applicable Notifications?

4) Whether the person is liable to remit service tax in terms of Rule 2 (1) (d) read with applicable notification?

5) Whether claims are barred by limitation in terms of the law laid down by the Apex Court?

11. It is also clarified that disposal of present petitions must not be construed as having adjudicated any of the contentions including jurisdiction. All contentions of both sides on merits are kept open.

12. Needless to state, upon conclusion of proceedings, if any of the petitioners are still aggrieved, legal remedies are kept open. It is also clarified that wherever, replies to show-cause notice have not been made out, the same may be filed upon matter being relegated as noticed above.

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13. Accordingly, the following:

ORDER

In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the same stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off.

Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-inOriginal, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in Column No.2 of the table relating to challenge to Orders-in-Original are disposed off.

The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders-in-

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original in question would also receive the same treatment, i.e. be set aside as per the directions made above.

Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."

10. The officers while disposing off the petitions to keep in mind the following:

1) Whether petitioners do not qualify under Section 65B(44) of the Finance Act, 1994 ?

2) Whether services are covered under negative list ?

3) Whether services are covered under the exemption list under the Notification No.25/2012-ST dated 28.06.2012 or under any other applicable Notifications?

4) Whether the person is liable to remit service tax in terms of Rule 2 (1) (d) read with applicable notification?

5) Whether claims are barred by limitation in terms of the law laid down by the Apex Court?

11. It is also clarified that disposal of present petitions must not be construed as having adjudicated any of the contentions including

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jurisdiction. All contentions of both sides on merits are kept open.

12. Needless to state, upon conclusion of proceedings, if any of the petitioners are still aggrieved, legal remedies are kept open. It is also clarified that wherever, replies to show-cause notice have not been made out, the same may be filed upon matter being relegated as noticed above.

13. Accordingly, the following:

ORDER

In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the same stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off.

Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-inOriginal, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in

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Column No.2 of the table relating to challenge to Orders-in-Original are disposed off.

The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders-inoriginal in question would also receive the same treatment, i.e. be set aside as per the directions made above.

Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."

Taking note of the above, the order-in-original

at Annexure-E is set aside. The matter is remitted to the stage of reply to the show cause notice. The authorities to take note of observations made in W.P.No.11154/2023 dated 03.07.2024 as extracted supra, in specific to the observations made in Para 10 of the order as may be applicable.

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In light of the assertion that copy of show cause notice has not been served, the Authorities to furnish copy of the same to the petitioner. Needless to state, the petitioner is at liberty to make out fresh reply to the said show cause notice. Petitioner to appear before respondent No.3 without waiting for any notice on 21.04.2026.

In light of setting aside of the order-in-original,

the authorities to recall their advice regarding attachment of Bank Account forthwith. All contentions are kept open.

10. Accordingly, petition is disposed of .

Sd/(S SUNIL DUTT YADAV) JUDGE

VP