Disposed¶55

Sri Bal Kishan Agarwal v. the Assistant Commissioner Central Tax

Karnataka HC8 Apr 2026WP/9034/2026

Case brief

AI extract

What is this about?

Service tax demand on retail provision/grocery trader based on CBDT inputs; Finance Act 1994 Sections 65B(44), 75, 77, 78; exemption Notification No.25/2012-ST dated 28.06.2012; Rule 2(1)(d); ex parte Order-in-Original set aside; remittance to show-cause notice reply stage; writ of certiorari under Articles 226 and 227; WP No. 9034 of 2026 (T-RES); related W.P.No.11154/2023 and connected matters dated 03.07.2024; Bengaluru South Commissionerate; neutral citation NC: 2026:KHC:19481.

What did the court decide?

Impugned Order-in-Original (Annexure-A) set aside; matter remitted to the stage of reply to the show-cause notice; petitioner to appear before respondent no.1 on 18.05.2026 without further notice. ¶55

Sri Bal Kishan Agarwal Vs the Assistant… — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Impugned Order-in-Original (Annexure-A) set aside; matter remitted to the stage of reply to the show-cause notice; petitioner to appear before respondent no.1 on 18.05.2026 without further notice.

¶55

Issue for consideration

Validity of the Order-in-Original raising service tax demand against the petitioner on the basis of inputs received from the Central Board of Direct Taxes (CBDT). +2 more

¶30

Court's answer

In light of the contentions raised and the observations made in W.P.No.11154/2023 and connected matters dated 03.07.2024, the Order-in-Original at Annexure-A is set aside and the matter is remitted to the stage of reply to the show-cause notice.

¶52

Ratio / Principle

The petitioner is directed to appear before respondent no.1 without further notice on 18.05.2026.

¶54

Detailed headnote1 paragraphs

High Court of Karnataka (S Sunil Dutt Yadav J, 08.04.2026) disposed of W.P. No. 9034 of 2026 (T-RES) filed by Sri Bal Kishan Agarwal, prop. of M/s. Hari Om Stores, challenging the Order-in-Original SI.NO.11/2022 SD-4 1756/22 dated 31.05.2022 (Annexure-A) of the Assistant Commissioner, Central Tax, South Div-4, Bengaluru South Commissionerate, which raised a service tax demand of Rs.13,83,992/- plus penalty under S.78 of Rs.13,83,992 and penalty under S.77 of Rs.30,000/- (totally Rs.27,97,984/-) with interest under S.75 of the Finance Act, 1994 for FY 2015-16 (AY 2016-17), allegedly relying on inputs received from CBDT, against a retailer of provisions and grocery items; proceedings were submitted to be ex parte. Following the approach in W.P.No.11154/2023 and connected matters dated 03.07.2024, the Court set aside the Order-in-Original and remitted the matter to the stage of reply to the show-cause notice, directing the petitioner to appear before respondent no.1 on 18.05.2026 without further notice; reconsideration is to address the five-point checklist (qualification under Section 65B(44) of the Finance Act, 1994; negative list; exemption under Notification No.25/2012-ST dated 28.06.2012; liability per Rule 2(1)(d); limitation per the law laid down by the Apex Court).

¶1

NC: 2026:KHC:19481 WP No. 9034 of 2026

¶2

¶3

HC-KAR

¶4

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶5

DATED THIS THE 8^TH DAY OF APRIL, 2026

¶6

BEFORE

¶7

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 9034 OF 2026 (T-RES)

¶8

BETWEEN:

¶9

SRI BAL KISHAN AGARWAL PROP. OF M/S. HARI OM STORES S/O FUL CHAND AGARWAL AGED ABOUT 59 YEARS, OPP. L AND T CITY APARTMENT, NO.155, 4^TH CROSS, 2^ND STAGE, AREKERE MICO LAYOUT, B.G.ROAD, BENGALURU-560 076.

¶10

… PETITIONER

¶11

(BY SRI. ARUNA BHAT, ADVOCATE)

¶12

AND:

¶13

Digitally signed by PRAKASH N 1. THE ASSISTANT COMMISSIONER Location: HIGH COURT CENTRAL TAX, SOUTH DIV-4, OF KARNATAKA BENGALURU SOUTH COMMISSIONERATE, C WING, 7^TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU-560 034

¶14

THE COMMISSIONER CENTRAL TAX, SOUTH DIV-4, BENGALURU SOUTH COMMISSIONERATE, C WING, 7^TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU-560 034.

¶15

¶16

NC: 2026:KHC:19481 WP No. 9034 of 2026

¶17

HC-KAR

¶18

MINISTRY OF FINANCE, REP.BY ITS SECRETARY, DEPARTMENT OF REVENUE, NEW DELHI-11001.

¶19

… RESPONDENTS

¶20

(BY SRI. ARAVIND V. CHAVAN, ADVOCATE)

¶21

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI, ORDER OR DIRECTION QUASHING THE IMPUGNED ORDER IN ORIGINAL SI.NO.11/2022 SD-4 1756/22 DATED 31.05.2022 ANNEXURE-A PASSED BY THE RESPONDENT NO.1 FOR THE FINANCIAL YEAR 2015-16 (ASSESSMENT YEAR 2016-17) VIDE RECOVERY INTIMATION DATED 27.02.2026 FILE NO. NO.GEXCOM /TECH/MISC/2219/2025-CGST-DIV-SD-4-COMMRTE 127/26, ALLEGING SERVICE TAX DEMAND AMOUNT OF RS.13,83,992/-, PENALTY UNDER S.78 RS.13,83,992 AND PENALTY UNDER S.77 RS.30,000/- TOTALLY AMOUNTING TO RS.27,97,984/- ALONG WITH INTEREST UNDER S.75 OF THE FINANCE ACT, 1994 TILL THE DATE OF ACTUAL PAYMENT AND ETC.

¶22

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

¶23

ORAL ORDER

¶24

Sri.Aravind Chavan, learned counsel accepts notice for the respondents.

¶25

The petitioner has called in question the validity

¶26

of the Order-in-Original at Annexure-A and submits that

¶27

3 - NC: 2026:KHC:19481 WP No. 9034 of 2026

¶28

HC-KAR

¶29

the authority while adjudicating the proceedings in terms

¶30

of the Finance Act, 1994, in order to raise demand regarding service tax has relied on the inputs received from the Central Board of Direct Taxes ('CBDT', for short).

¶31

It is submitted that in similar cases, the authorities in order to raise demand of service tax have relied on the inputs received from CBDT.

¶32

This Court in W.P.No.11154/2023 and connected

¶33

matters dated 03.07.2024 has set aside an identical order and remitted the matter back for reconsideration in terms of the observations made in the said order.

¶34

Learned Counsel for petitioner submits that the proceedings are ex parte and the petitioner did not have opportunity to make out reply.

¶35

It is further submitted that the question of raising

¶36

any demand relating to service tax is inapplicable as petitioner carries on business of retail trading of provisions

¶37

4 - NC: 2026:KHC:19481 WP No. 9034 of 2026

¶38

HC-KAR

¶39

and grocery items in a Provision Store. As it involves sale of goods, the question of invoking liability of service tax does not arise.

¶40

Perused the order passed in W.P.No.11154/2023

¶41

and connected matters dated 03.07.2024. Para 10 of the order reads as under:

¶42

"10. The officers while disposing off the

¶43

petitions to keep in mind the following:

¶44

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

¶45

2) Whether services are covered under negative list ?

¶46

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 ?

¶47

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

¶48

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

¶49

¶50

NC: 2026:KHC:19481 WP No. 9034 of 2026

¶51

HC-KAR

¶52

In light of the contentions raised and observations made in W.P.No.11154/2023 and connected matters dated 03.07.2024, the Order-in-Original at Annexure-A is set

¶53

aside and the matter is remitted to the stage of reply to the show-cause notice.

¶54

Petitioner to appear before the respondent no.1 without further notice on 18.05.2026.

¶55

Accordingly, the petition is disposed of.

¶56

Sd/(S SUNIL DUTT YADAV) JUDGE

¶57

Sri Bal Kishan Agarwal v. the Assistant Commissioner Central Tax

Case brief

What is this about?

What did the court decide?

Sri Bal Kishan Agarwal v. the Assistant Commissioner Central Tax

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Element 14 India Private Limited Vs Assessment Unit

Fortuna Energy Infrastructures Vs the Assistant Commissioner of Central Tax

The Stems N Leaves International Vs the Superintendent of Central Tax (Gst)

Sri Bal Kishan Agarwal Vs the Assistant Commissioner Central Tax

Mrs. Sameena Ahmed Sharieff Vs Assistant Commissioner of Central Tax.

M/S Unnathi Digital Edge (P) Limited Vs the Assistant Commissioner of Central Taxes