M/S KALYANI PROJECTS, vs THE DEPUTY COMMISSIONER
- Court
- Karnataka High Court
- 1 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
IN THE HIGH COURT OF KARNATAKA AT DHARWAD
TH
DATED THIS THE 30 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE T.M.NADAF
WRIT PETITION NO.107993 OF 2026 (T-RES)
BETWEEN:
M/S. KALYANI PROJECTS,
REP. BY ITS PARTNER,
SHRI. MADIRAJU VENKATA SUBRAHMANYA TILAK,
AGE. 59 YEARS, CTS NO.3621,
OLD MANIKBAG, OLD P.B. ROAD, BELAGAVI-590001.
GSTIN: 29AAJFK4600K1Z6.
…PETITIONER
(BY SRI. H.R. KAMBIYAVAR, ADVOCATE)
AND:
1. THE DEPUTY COMMISSIONER
OF COMMERCIAL TAXES, (AUDIT)-1
SUMOULYA - SOUDHA,
ST
1 FLOOR, CLUB ROAD,
DIST. BELAGAVI-590001.
2. THE STATE OF KARNATAKA,
REP. BY THE PRINCIPAL SECRETARY,
FINANCE DEPARTMENT,
GOVERNMENT OF KARNATAKA,
DR. B.R. AMBEDKAR, VEEDHI,
BENGALURU-560001.
Digitally signed by
THEJAS KUMAR N
Location: High
Court of
Karnataka,
Dharwad Bench
3. GOVERNMENT OF INDIA,
MINISTRY OF FINANCE (DEPARTMENT OF REVENUE),
CENTRAL BOARD OF EXCISE AND CUSTOMS
GST POLICY WING, NEW DELHI-110011.
…RESPONDENTS
(BY SMT. KIRTILATA R.PATIL, HCGP FOR R1 AND R2;
SRI. GIRISH S.HULMANI, ADVOCATE FOR R3)
- 2 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO (I) ISSUE WRIT OF
CERTIORARI OR IN THE LIKE NATURE OF CERTIORARI QUASHING AN
IMPUGNED EX-PARTE ADJUDICATION ORDER DTD: 16/06/2026
BEARING NO.DCCT AUDIT1 BELAGAVI: U/S 73 (9): 2026-27:B, FOR
THE TAX PERIOD F.Y. 2023-24, U/S.73 (9) OF THE KGST/CGST ACT-
2017 PASSED BY THE RESPONDENT NO.1 VIDE ANNEXURE-B. (II)
PASS SUCH OTHER ORDER OR FURTHER ORDERS AS THIS HON’BLE
COURT MAY DEEMS FIT IN THE FACTS AND CIRCUMSTANCES OF
THIS CASE, IN THE INTEREST OF JUSTICE AND EQUITY.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE T.M.NADAF
ORAL ORDER
This Writ Petition is filed seeking following reliefs:
(i) Issue Writ of Certiorari or in the like nature of
Certiorari quashing the impugned ex-parte
adjudication order dated 16.06.2026 bearing
No.DCCT AUDIT1 BELAGAVI : U/S 73(9) :
2026-27:B, for the tax period F.Y 2023-24,
U/s.73(9) of the KGST/CGST Act, 2017 passed
by respondent No.1 vide Annexure-B.
(ii) Pass such other Order or further Orders as this
Hon’ble Court may deems fit in the facts and
circumstances of this case, in the interest of
justice and equity.
2. Facts in brief to file the present petition are as
under:
- 3 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
2.1 A show cause notice came to be issued by
respondent No.1 on 20.03.2026 under Section 73(1)
1
of the Karnataka Goods and Service Tax Act, 2017 ,
stating that there is difference between GSTR-7 &
GSTR-3B and P & L/9C & GSTR-3B and proposed to
levy tax, interest and penalty of Rs.1,51,08,766/-.
2.2 It is the case of the petitioner that, pursuant to the
show cause notice, the petitioner could not appear
before the concerned authority, as the Chartered
Accountant/ Tax Practitioner of the petitioner was
suffering from certain medical complications, for
which he was also admitted to Hospital on two
occasions. It is under these circumstances the
petitioner could not be present along with the
documents to substantiate its case. In that an event,
the Order in Original came to be passed, demanding
sum of Rs.1,51,08,766/- including interest, directing
the petitioner to deposit entire sum within 90 days,
1
‘The Act of 2017’, for short
- 4 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
lest the further action would be contemplated under
the provisions of the Act of 2017. Aggrieved by the
said order, the petitioner is before this Court seeking
the relief supra.
3. Heard, Sri.H.R.Kambiyavar, learned counsel
appearing for the petitioner, Smt.Kirtilata R.Patil, learned
High Court Government Pleader appearing for respondents
1 and 2 and Sri.Girish S.Hulmani, learned counsel
appearing for respondent No.3.
4. Sri.H.R.Kambiyavar, relying on the order
passed by this Court in the case of M/S.KING
ENTERPRISE VS. ASSISTANT COMMISSIONER OF
2
COMMERCIAL TAXES (AUDIT) , submits that in an
identical matter, this Court allowed the Writ Petition and
quashed the adjudication order and summary order and
restored the proceedings to the file of respondent for due
consideration subject to petitioner therein depositing 10%
2
W.P.No.107391/2026, disposed of on 11.09.2026
- 5 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
of the tax in demand, subject to the outcome of the
restored proceedings. In that view of the matter, learned
counsel submits that this Writ Petition may also be
disposed of in terms of the Writ Petition mentioned afore.
5. Smt.Kirtilata R.Patil, learned HCGP and
Sri.Girish S.Hulmani, in unison argued in support of the
Order in Original and submit that, the documents
produced for not appearing before the adjudication officer,
are all dated subsequent to issuance of show cause notice
i.e., four months after issuance of notice. In that an
eventuality, the contention of the petitioner cannot be
countenanced. They submit that though the petitioner has
been notified of the show cause notice, which is not
denied, the petitioner has run the risk of remaining absent
before the concerned authority. In that view of the matter,
the order does not call for any interference.
6. Having considered the rival submissions, this
Court perused the entire Writ Petition papers.
- 6 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
7. This Court in an identical matter, i.e., in the
case of M/s.KING ENTERPRISE supra, passed the
following order:
“ ORAL ORDER
This Writ Petition is filed seeking following relies:
“WHEREFORE
, it is respectfully prayed that this
Hon’ble Court may be please to:
a. To issue order(s), direction(s), wirt(s), in the nature
of Certiorari quashing the Order-in-Original bearing
Ref No.ACCT/ADT/GDG/DRC-07/2026-27/B issued by
the respondent dated 29.04.2026 enclosed as
Annexure-A , to the extent pre-judicial to the
petitioner;
b. To issue order(s), direction(s), writ(s) in the nature
of Certiorari quashing the summary order in Form
DRC – 07 bearing Reference No. ZD290426149934U
dated 29.04.2026, issued by respondent as
Annexure-A1, to the extent pre-judicial to the
Petitioner;
c. To issue order(s), direction(s), writ(s) in the nature
of Mandamus directing the Respondent to adjudicate
the matter afresh after affording the Petitioner a
reasonable and effective opportunity of personal
hearing, duly considering the replies filed by the
Petitioner together with all documentary evidence
and submissions, and thereafter pass a reasoned and
speaking order in accordance with law;
d. To issue order(s), directions, writ(s) in the nature of
Mandamus directing the Respondent to holding that
no interest and penalty is payable by the Petitioner
under the Impugned Order enclosed at Annexure-A;
e. To issue order(s), directions, writ(s) or any other
relief as this Hon’ble Court deems it fit and proper in
the facts and circumstances of the case in the
interest of justice.”
- 7 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
2. The Adjudication Officer has passed the
Order in Original vide Annexure-A dated 29.04.2026,
whereby adjudicated the Tax as well as Penalty at
Rs.12,87,526/-. Further ordered that, if the taxpayer
pays the tax, interest and a reduced penalty of 50%
within thirty days of receiving the order, the proceedings
are concluded. Failure to pay within the timeframe,
results in full 100% penalty being payable and potential
recovery proceedings.
3. Further directed that, along with the above
tax liability, the taxpayer is also liable to pay penalty
equivalent to 100% of the tax liability under each act, if
failed to pay the tax and interest as per the above table
within 30 days’ of issue of DRC-07 as per Section 74(9)
of the GST Act, 2017.
4. Heard Sri.Bhagwati P., learned counsel
appearing for the petitioner and Smt.Nandini Somapur
learned AGA for the respondent/state.
5. Facts germane to file the present petition
are as under:
5.1 The petitioner is a registered Proprietorship
concern, engaged in the business of ferrous waste
and scrap trade, including remelting scrap ingots
of iron or steel, and has been regularly carrying on
business under the GST regime holding GSTIN:
29ALHPK4646E3ZX.
5.2 A show cause notice was issued on 09.12.2025 by
the respondent in Form GST DRC-01 bearing
- 8 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
Reference No.ZD291225079924V, proposing
reversal of Input Tax Credit.
6. As per Sri.Bhagwati P., the show cause
notice and all subsequent communications, including
reminders fixing a personal hearing were uploaded only
on the common GST portal. Owing to a change in the
petitioner's GST consultant during the relevant period
and the fact that the communications remained
unnoticed on the portal, the petitioner could neither
submit an effective reply nor appear before the
Respondent during the adjudication proceedings.
7. Though several reminders were issued by
the respondent on 13.01.2026, 06.02.2026 and
26.02.2017, but all were uploaded only on the GST
portal. As stated supra, since the communications were
unnoticed, the petitioner remained unaware of the
proceedings and in consequence thereof, he did not
participate in the adjudication. In that view of the
matter, the entire proceedings went in ex-parte, passing
the Order in Original determining the Tax as well as
Penalty payable to the extent of Rs.12,87,526/-.
8. This case pertains to the adjudication
orders/summary for the period between April-2022 to
March-2023.
9. Sri.Bhagavati P., in support of his case
referred and relied on the judgment of Co-ordinate
Bench of this Court in W.P.No.24780/2026 disposed on
12.08.2026 in the case of M/S. ZEAL GROUP VS.
- 9 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
DEPUTY COMMISSIONER OF COMMERCIAL TAXES
(AUDIT)-5.9 , (M/S. ZEAL GROUP) and submits that,
the Coordinate Bench of this Court, in the similar
circumstances, considering the case of the petitioner
allowed the Writ Petition, quashed the Order in Original
passed by the respondent and remitted the matter,
restoring the proceedings on the file of respondent for
due consideration subject to petitioner depositing 10% of
the Tax in demand, within the period granted by the
Court, which is subject to the outcome of the restored
proceedings and permitted the petitioner to file response
to the show cause notice along with the copy of the order
and the copies of the documents to show the
genuineness of transactions.
10. Smt.Nandini Somapur, learned AGA would
submit that the contention of Sri.Bhagavati.P., that all
communications are uploaded only in the common GST
portal, are not tenable. Apart from uploading the dates of
the reminders, communications, show cause notice and
fixing the date of personal hearing in common GST
portal, the same are also communicated through email
as well as post. In that view of the matter, the
contention of the petitioner does not hold any water. She
further submits that the authority passed the Order in
Original, after affording sufficient opportunity, which was
not availed by the petitioner. In these circumstances, the
authority proceeded to pass the order on the available
documents. As such, the same does not call for any
interference by this Court.
- 10 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
11. Having considered the rival submissions,
this Court has perused the entire writ petition papers.
12. To the query of the Court, learned AGA is
unable to point out the documents which has been sent
by way of e-mail as well as post, apart from uploading
the same in common GST portal. In that view of the
matter, this Court has to consider that, the show cause
notices and subsequent communications including
demand and other things were uploaded only on the
common GST portal and that, as contented by the
learned counsel, Sri.Bhagavati P., were remained
unnoticed.
13. The petitioner should have been more
circumspect and cautious while maintaining his
documents and records, so also the dealings with the
State Revenue Authorities. The matter pertains to
revenue of the State, however, at the very same time, it
cannot be lost sight that, the entire matter went ex-parte
without affording an opportunity under law as per the
provisions contained in the GST Act, 2017.
14. The coordinate Bench of this Court in the
case of M/S. ZEAL GROUP (supra), upon consideration
of the rival submissions, allowed the Writ Petition,
restoring the proceedings subject to the petitioner
depositing 10% of the tax in demand. The relevant
paragraphs finds place in paragraph Nos.5 and 6, read as
under:
“5. This Court, in the circumstances, examines
whether the petitioner must be admitted to another
- 11 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
reasonable opportunity based on the peculiarities of
the case. The respondent has referred to the Show
Cause Notice in GST DRC-01 dated 23.07.2024 being
uploaded on the common portal according to the Act
without mentioning the other modes of
communication of the Show Cause Notice. The
respondent has also referred to an opportunity of
personal hearing being extended to the petitioner
observing that the petitioner has not availed this
opportunity but without further details of the
opportunity so extended. The relevant part of the
Adjudication Order read thus.
“In view of natural justice three opportunities
of time and personal hearing was offered vide ref
(3,4 and 5). Further all the correspondence was
done through GST common portal which enables
the RTP to view the notices or correspondence
done on their personal dashboard. However the
RTP has not responded. In addition, an email was
also sent to the registered email address vide
reference
(6). Despite receipt of the show cause notice,
the Designated Authorized Representative (DAR) of
the taxpayer failed to file any reply. The
undersigned also sent communications to the
authorized email address and contacted the
authorized mobile number as uploaded on the
portal. However, no response was received and no
reply was submitted.”
6. The petitioner contends that the
mismatch between Forms GSTR-3B and
GSTR-2A can be explained with the support of
the documents, When all the circumstances
are considered, this Court is of the view that
the petition must be disposed of extending
another opportunity to the petitioner without
expressing any view on reading down Section
16[2][c] of the CGST/ KGST Act, 2017 and
Rule 36[4] of the CGST/ KGST Rules, 2017.
Hence, the following
ORDER
The petition is allowed and the
Adjudication Order dated 30.12.2025
[Annexure-A] and Summary of the Order
dated 30.12.2025 [Annexure-A1] are quashed
subject to the following terms.
[a] The proceedings are restored to the
respondent for due consideration subject to
the petitioner depositing 10% of the tax in
- 12 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
demand by 30.09.2026 subject to the
outcome in the restored proceedings.
[b] The petitioner is permitted to file a
response to the Show Cause Notice along
with a certified copy of this Order and the
copies of the documents to show the
genuineness of the transactions along with
the reconciliation.
[c] The petitioner shall produce these
documents by 30.09.2026 and the
respondent shall consider these documents
and then conclude the proceedings by a
reasoned order.”
15. In the case on hand too, the petitioner
submits that mismatch between the forms GSTR-3B and
GSTR-2A can be explained with the support of the
documents and in the case on hand, the supplier has
filed the returns, however, his registration was cancelled,
the said facts were not brought to the notice of the
authority before passing an Order. If the matter is
remanded and an opportunity is granted, the same would
be explained and satisfied in terms of the provisions
contemplated under the GST Act, 2017.
16. Considering the submissions and in view of
the order passed by the Co-ordinate Bench of this Court,
M/S. ZEAL GROUP (supra), the petition deserves to be
allowed.
17. In the result, I proceed to pass the
following:
ORDER
i. The petition is allowed and the adjudication order
and summary order dated 29.04.2026 passed in
- 13 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
Ref No.ACCT/ADT/GDG/DRC-07/2026-27/B are
hereby quashed.
ii. The proceedings are restored to the file of
respondent for due consideration subject to the
petitioner depositing 10% of the tax in demand on
or before 05.10.2026 subject to the outcome in
the restored proceedings.
iii. The petitioner is permitted to file a response to the
show cause notice along with the certified copy of
this order and the copies of the documents to
show the genuineness of the transactions along
with the reconciliation.
iv. The petitioner shall produce the documents by
05.10.2026 and the respondent shall consider the
documents and then conclude the proceedings by
a reasoned order within two months thereafter.”
8. Though this Court finds some force in the
argument of learned counsel appearing for the
respondents, however the fact remains that the
documents which were though dated subsequent to the
date of issuance of show cause notice, clearly indicate that
the Chartered Accountant/ Tax Practitioner of the
petitioner was suffering from certain medical complications
- 14 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
since eight months from the date of issuance of discharge
summary.
9. Moreover, the matter pertains to Tax and the
demand is running in Crores. The petitioner is required to
be given one more opportunity to put forth its case in
respect of genuinity claimed by the petitioner, with respect
to the transactions. In that view of the matter, in view of
the law laid down by this Court in M/s.KING
ENTERPRISE supra, this Court proceeds to pass the
following:
ORDER
(i) The Writ Petition is allowed .
(ii) The impugned adjudication order dated
16.06.2026 bearing No.DCCT AUDIT1
BELAGAVI: U/S 73(9) : 2026-27, for the
tax period F.Y 2023-24, passed by
respondent No.1 vide Annexure-B is
quashed.
- 15 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
(iii) The proceedings are restored to the file
of respondent No.1 for due
consideration subject to the petitioner
depositing 10% of the tax in demand on
or before 13.11.2026 subject to the
outcome in the restored proceedings.
(iv) The petitioner is permitted to file a
response to the show cause notice along
with the certified copy of this order and
the copies of the documents to show the
genuineness of the transactions along
with the reconciliation.
(v) The petitioner shall produce the
documents by 13.11.2026 and
respondent No.1 shall consider the
documents and then conclude the
proceedings by a reasoned order within
two months thereafter.
- 16 -
HC-KAR
NC: 2026:KHC-D:17880
WP No. 107993 of 2026
CNR: KAHC020169612026
(vi) The deposit of amount is condition
precedent for filing response and
producing the document and the
authority to hear and pass the order
thereon. Any failure to deposit the
amount within the timeframe supra, the
order passed today stands automatically
recalled.
10. In view of disposal of the Writ Petition, pending
interlocutory applications, if any, stand disposed of.
Sd/-
(T.M.NADAF)
JUDGE
TKN
CT: UMD
List No.: 1 Sl No.: 35