Sri. Nanjundeshwara Traders Vs Commissioner of Commercial Taxes Karnataka
Date: July 22, 2025
Subject Matter
Taxpayer reply not needed when all necessary details and records are available with the department
Summary
The petitioner, a company, challenged an adjudication order dated August 26, 2024, passed by the Commercial Tax Officer (Audit)-6.9, Bengaluru. The order was issued under Section 73(9) of the KGST Act, 2017 and CGST Act, 2017, for the tax periods of April 2019 to March 2020. The petitioner's grievance was that the respondent had failed to consider that the Input Tax Credit (ITC) for the year 2018-19 was claimed in the subsequent year, 2019-20, particularly for amounts under the Reverse Charge Mechanism (RCM).
The learned HCGP for the respondent contended that the petitioner had not replied to the show cause notice, which prevented the authorities from considering their case.
The court, however, referred to its own recent order in M/S NL TILE ART PVT LTD vs. Commissioner of Commercial Taxes, Karnataka & Ors., where it had held that in cases of ITC claimed in a subsequent year, the annual returns of both years must be taken into consideration for reconciliation. The court noted that all necessary details and records were available with the respondents, which could have been used for this reconciliation, irrespective of the petitioner's reply.
The court allowed the writ petition and quashed the adjudication order dated August 26, 2024. The matter was remitted to the respondent for fresh consideration. The court directed the petitioner to appear before the respondent on August 21, 2025, without any further notice, and to submit a reply to the show cause notice. The fresh consideration is to be done in line with the court's observations in this case and in the M/S NL TILE ART PVT LTD case.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. Learned HCGP is directed to accept notice for respondents No.1 and 2.
2. The petitioner is before this Court seeking for the following reliefs;
i. issue a writ of certiorari or a declaration in the nature of writ of certiorari quashing the Adjudication Order dated 26-08-2024 passed by the Commercial Tax Officer (Audit)-6.9, DGSTO-06, Bengaluru, the second respondent herein, in No.GST-A.0.73-32/CR-150/2024-25/T.No.-267/2024-25 and summary of order dated 26-08-2024 in No.ZD2908240912624 under sections 73(9) of the KGST Act, 2017 and CGST Act, 2017 for the tax periods April 2019 to March 2020, in the case of the petitioner – ANNEXURE – C;
ii. and grant such other relief or reliefs as this Hon’ble Court may deem fit in the circumstances of the case, in the interest of justice.
3. The issue in the present matter has been dealt with by this Court in today’s order in WP No.20196/2025 in M/S NL TILE ART PVT LTD vs. Commissioner of Commercial Taxes, Karnataka & Ors., inasmuch as the issue being non-claiming of ITC in a particular year and claim being made in a subsequent year, I have come to a conclusion that in such circumstances the annual returns would have to be taken into consideration and then the reconciliation would have to be done.
4. In the present case also, the contention of learned counsel for the petitioner is that the ITC for the year 2018-19 has been claimed in the year 2019-20, moreso, on Reverse Charge Mechanism (RCM) basis which has not been taken into consideration by the respondents.
5. Though learned HCGP submits that the show-cause notice had not been replied to by the petitioner and the same could not be considered. The fact still remains that all the necessary details and records are available with the respondents which could have been considered irrespective of whether petitioner had replied to the show-cause notice or not and the reconciliation of the accounts made. This reconciliation would not require the reply of the petitioner and/or the explanation of the petitioner, since all the documents are available with the respondent.
6. In that view of the matter, I pass the following;
ORDER
i. Writ petition is
ii. A certiorari is issued, the Adjudication Order dated 26.08.2024 passed by the Commercial Tax Officer (Audit)-6.9, DGSTO-06, Bengaluru-respondent No.2-herein in No.GST-A.0.73- 32/CR-150/2024-25/T.No.-267/2024-25 and summary of order dated 26.08.2024 in No.ZD2908240912624 at ANNEXURE-C is hereby quashed.
iii. The matter is remitted to respondent No.2 for fresh consideration in terms observation made in the present matter as also in order dated 23.7.2025 in WP No.20196/2025 in M/S NL TILE ART PVT LTD vs. Commissioner of Commercial Taxes, Karnataka & Ors.
iv. Since the present order is passed in the presence of both the counsels, the petitioner shall appear before respondent No.2 without requirement of any further notice on 21.8.2025 and submits his reply to the show-cause notice.