UNO IN QUALITY BUSINESS HOTEL, vs COMMERCIAL TAX OFFICER,
- Court
- Karnataka High Court
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 6 DAY OF OCTOBER 2026
BEFORE
THE HON'BLE MR. JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 29585 OF 2026 (T-RES)
BETWEEN:
UNO IN QUALITY BUSINESS HOTEL,
A PROPRIETORSHIP CONCERN,
PRESENTLY AT, PLOT NO. 7,
OPP. URDU SCHOOL, RAJAKPALYA,
BAGALUR, BENGALURU-562149
REPRESENTED BY ITS PROPRIETOR,
SRI. UNO IQBAL,
AGED ABOUT 50 YEARS,
S/O SRI. MOHAMMAD WAHAB.
…PETITIONER
Digitally
signed by
VANAMALA
N
Location:
HIGH
COURT OF
KARNATAKA
(BY SRI. THIRUMALESH M., ADVOCATE)
AND:
COMMERCIAL TAX OFFICER,
LGSTO-111, DGSTO-03,
JAYANAGAR,
BENGALURU 560011.
…RESPONDENT
(BY SMT.MALAVIKA PRASAD., HCGP)
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
THIS WP IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO
I) QUASHING THE IMPUGNED ADJUDICATION ORDER
NO. CTO(LGSTO)-111/T. /2022-2023 DATED
30.01.2023, ISSUED BY THE COMMERCIAL TAX
OFFICER, LGSTO-111, DGSTO-3, BENGALURU-560011
UNDER SECTION 73 OF THE CGST ACT, DEMANDING
TAX ALONG WITH INTEREST AND PENALTY FOR THE FY
2017-18 (ANNEXURE B); (II) QUASHING THE IMPUGNED
GST DRC-07 SUMMARY OF THE ORDER DATED
23.04.2024 NO. ZD290424060778W, ISSUED BY THE
COMMERCIAL TAX OFFICER, LGSTO-111, DGSTO-3,
BENGALURU-560011 UNDER SECTION 73 OF THE
CGST ACT, DEMANDING TAX ALONG WITH INTEREST
AND PENALTY FOR THE FY 2017-18 (ANNEXURE C);
(III) DECLARING THAT THE PETITIONER IS NOT LIABLE
TO PAY TAX ALONG WITH INTEREST AND PENALTY
UNDER THE CGST ACT ON EXCESS AVAILMENT OF ITC
AS THERE IS NO EXCESS ITC AVAILED WITH RESPECT
TO CGST AND SGST ON COMPARISON OF GSTR-3B AND
GSTR-2A UNDER SECTION 16 OF THE CGST ACT
(ANNEXURE-B).
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
ORAL ORDER
The petitioner has called in question the
following which relate to the financial year 2017-18
seeking declaration that the petitioner is not liable to
pay tax, penalty and interest on the alleged excess
availment of Input Tax Credit [ITC].
Sl. Particulars Provisions
No. of KGST
Act, 2017
Annexures
1 Adjudication Order 73 B
dated 30.01.2023
2 Summary of the Order
uploaded on
23.04.2024
C
2. Mr. M. Thirumalesh, the learned counsel
for the petitioner, and Ms. Malavika Prasad, a learned
High Court Government Pleader, who accepts notice
for the respondents, are heard on whether this Court
must interfere with the impugned orders and restore
the proceedings for reconsideration leaving open the
question of the petitioner being liable to pay tax,
penalty and interest on the ground that it has
claimed excess ITC in the following circumstances.
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
a) Upon the petitioner's request, the petitioner's
GST registration is cancelled vide Order dated
18.01.2022. The petitioner’s request is because
of the decision to close the business.
b) The petitioner is issued with the Intimation in
Form GST DRC-01A dated 16.07.2022 and the
Show Cause Notice dated 07.10.2022. The
petitioner asserts that it has not received the
notice and it has availed ITC available from the
previous Financial Year.
3. The petitioner contends that because it
had closed its business, its representatives did not
have occasion to check the portal for notices or
orders uploaded. On behalf of the authorities, it is
stated, placing on record a copy of the postal
Endorsement that the petitioner's representative has
received the notice but has not responded. The
Adjudication Order is dated 30.01.2023 and the
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
summary thereof has been uploaded along with the
Order only on 23.04.2024.
4. The petitioner did not have an opportunity
between January 2023 and April 2024 even if the
petitioner's representative had access to the portal to
know about the impugned order. On behalf of the
respondents, it is stated that the Order has been sent
to the registered address but only to be returned with
the Endorsement that the firm is no longer at the
address.
5. On merits, the petitioner contends that it
had ITC relevant to the financial previous financial
year 2017-18 in its Electronic Credit Ledger and that
it is entitled to avail the same for the next financial
year and the allegation of excess ITC because of the
difference between Forms GSTR-2A and GSTR-3B for
the next financial year is overlooking the fact that the
petitioner had claimed ITC.
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HC-KAR
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WP No. 29585 of 2026
CNR: KAHC010647122026
6. The fact that the petitioner had sought for
cancellation of GST registration because of the
closure of its business is undisputed. The notice sent
to the petitioner has been received, but then if the
petitioner had relocated and the acknowledgement is
received by somebody else that will not be the reason
for the Authorities to state that the petitioner had
notice of those Orders. This Court also opines that
the petitioner’s representative, because the business
was closed and possibly because the ITC was
available for the previous year, did not have the
occasion to anticipate the initiation of proceedings.
7. The salient as discerned is the fact that it
remains uncontested whether the petitioner had ITC
available for the previous financial year which is
claimed in the next financial year has to be verified.
These compelling circumstances persuade this Court
to opine that there must be interference with the
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
Adjudication Order restoring the proceedings to the
respondent with due opportunity to the petitioner. In
the light of the afore, the following.
ORDER
[A] The petition is allowed in-part.
[B] The Adjudication Order dated
30.01.2023 and the Summary thereof
dated 23.04.2024 [Annexures – B and
C] are quashed.
[C] The proceedings are restored to the
respondent with opportunity to the
petitioner to file Response to the Show
Cause Notice dated 07.10.2022.
[D] The petitioner shall file Response
without further notice with the
respondent on 16.11.2026 along with
all the documents to substantiate its
case that it has availed ITC in the
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HC-KAR
NC: 2026:KHC:55516
WP No. 29585 of 2026
CNR: KAHC010647122026
Electronic Ledger Form for the previous
year and it is entitled to such
exemption.
Sd/-
(B M SHYAM PRASAD)
JUDGE
AN/-