M/S Rj Craft Interior Vs the Assistant Commissioner… — GST and Indirect Tax | Karnataka HC (2026)

M/S Rj Craft Interior Vs the Assistant Commissioner… — GST and Indirect Tax | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Adjudication order dated 21.12.2023 (Annexure-A) set aside; matter remitted to the respondent for reconsideration with liberty to the petitioner to reply to the show-cause notice; recovery proceedings pursuant to the adjudication set aside â€— subject to petitioner's appearance on 19.05.2026 and payment of Rs.10,000/- cost to the Karnataka Advocates Clerks Benevolent Trust.

Issue for consideration

Whether the adjudication order dated 21.12.2023 passed under Section 73 of the GST Act for tax periods July 2017 to March 2018 â€” concluded without any reply to the show-cause notice on a merely factual ITC discrepancy â€” ought to be set aside and the matter remitted for fresh consideration. +1 more

Court's answer

Since the premise of the adjudication was a factual discrepancy in the ITC claim and the authority concluded adjudication without the benefit of any reply to the show-cause notice, it was appropriate to set aside the order at Annexure-A by putting the petitioner on terms.

Ratio / Principle

The order at Annexure-A is set aside and the matter remitted to the respondent for reconsideration; the petitioner is permitted to file a reply to the show-cause notice and the authority may then complete adjudication as permissible in law; recovery proceedings pursuant to the adjudication order are also set aside.

Key takeaways

Despite the delay, relief was granted on terms: the petitioner to appear before the respondent without further notice on 19.05.2026 and to pay costs of Rs.10,000/- to the Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru.ratio¶¶41

Detailed headnote1 paragraphs

GST â€“ Section 73 adjudication â€“ Order dated 21.12.2023 for tax periods July 2017 to March 2018 raising demand on account of ineligible ITC, based on a discrepancy between GSTR-3B-4(A)3 and the declaration in GSTR-3B (3.1)(d), was passed ex parte as no reply to the show-cause notice had been filed – discrepancy being factual in nature and adjudication having concluded without the benefit of any reply, the High Court set aside the order at Annexure-A and remitted the matter to the respondent for reconsideration, permitting the petitioner to file a reply to the show-cause notice whereafter the authority may complete adjudication as permissible in law – recovery proceedings pursuant to the adjudication were also set aside – relief granted on terms: petitioner to appear before the respondent without further notice on 19.05.2026 and to pay cost of Rs.10,000/- to the Karnataka Advocates Clerks Benevolent Trust – petition disposed of (W.P. No. 9904/2026, T-RES; S Sunil Dutt Yadav, J.; 21.04.2026).

NC: 2026:KHC:21588 WP No. 9904 of 2026

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HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 21^ST DAY OF APRIL, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

WRIT PETITION NO. 9904 OF 2026 (T-RES)

BETWEEN:

M/S. RJ CRAFT INTERIOR, PROPERIETORSHIP CONCERN HAVING ITS PRINCIPAL PLACE OF BUSINESS AT B2, ANANTH KRUPA, GROUND FLOOR, HESARAGHATTA ROAD, TARABANAHALLI, BENGALURU - 560 090, GSTIN 29AERPN0960K1ZV, REPRESENTED BY ITS PROPRIETOR, SRI. JAGALAL NISHAD.

&PETITIONER

(BY KUM. VEENA KAMATH, ADVOCATE)

AND:

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO-66, DGSTO -6, 1^ST FLOOR, KIADB BUILDING, 14^TH CROSS, PEENYA 2^ND STAGE, BENGALURU - 560 058.

&RESPONDENT

(BY SMT. JYOTHI M. MARADI, HCGP)

THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 21.12.2023 PASSED BY THE RESPONDENT FOR THE TAX PERIODS JULY 2017 TO MARCH

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2018 UNDER SECTION 73 OF THE GST ACT AT ANNEXURE-A, BY ISSUING A WRIT OF CERTIORARI AND REMAND BACK THE MATTER TO THE RESPONDENT FOR FRESH CONSIDERATION BY PROVIDING THE PETITIONER A FAIR AND SUFFICIENT OPPORTUNITY OF HEARING AND THEREAFTER PASS AN ORDER IN ACCORDANCE WITH LAW BY ISSUING A WRIT OF MANDAMUS OR ANY OTHER ORDER OR WRIT IN THE NATURE OF WRIT OF MANDAMUS.

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

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

ORAL ORDER

Learned High Court Government Pleader accepts notice for the respondent.

The petitioner has called in question the correctness of the order of adjudication. The petitioner submits that they had not made out reply to the showcause notice due to bonafide reasons and in light of no response having been made, authority has adjudicated the case on the basis of materials available with it.

It is further submitted that dispute relates to ineligible Income Tax Credit (ITC) and the discrepancy

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relates to GSTR-3B-4(A)3 vis-à-vis declaration in GSTR-3B (3.1)(d)). It is submitted that in light of the alleged discrepancy which is factual in nature, the petitioner if granted an opportunity, would meet the discrepancies as made out in the show-cause notice. Accordingly, request is made for setting aside of the impugned order.

Learned High Court Government Pleader

submits that the order sought to be set aside is of 21.12.2023 and the petitioner has approached after undue delay.

Perused the order at Annexure-A. The premise

on the basis of which the authorities have proceeded is that there is a discrepancy insofar as ITC claim. The said aspect is factual in nature and noticing that the authority has concluded adjudication without having the benefit of a reply to the show-cause notice, and in light of the assertion of the petitioner, it would be appropriate to set

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NC: 2026:KHC:21588 WP No. 9904 of 2026

HC-KAR

aside the order at Annexure-A, by putting the petitioner on terms.

Accordingly, the order at Annexure-A is set aside. Matter is remitted to the respondent for reconsideration. Petitioner is permitted to make out a reply to show-cause notice and thereafter the respondent authority may proceed to complete adjudication as is permissible in law. In light of setting aside of the order of adjudication, recovery proceedings pursuant to which having been initiated are set aside.

Petitioner to appear before the respondent

without further notice on 19.05.2026. Petitioner to pay cost of Rs.10,000/- to the Karnataka Advocates Clerks Benevolent Trust, High Court Building, Bengaluru.

Accordingly, petition is disposed of .

SD/(S SUNIL DUTT YADAV) JUDGE

MCR