Karnataka High Court
Rekha Industries vs The Assistant Commissioner Of ... on 28 August, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2024:KHC:34452
WP No. 14455 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF AUGUST, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 14455 OF 2024 (T-RES)
BETWEEN:
REKHA INDUSTRIES,
A PROPRIETARY CONCERN
REPRESENTED BY ITS PROPRIETOR
SHRI. LOKESHA GOWDA,
SON OF LATE SHRI THIMMEGOWDA,
AGED ABOUT 47 YEARS,
HAVING OFFICE AT NO.320,
INDUSTRIAL GROWTH CENTRE,
KIADB, H.N.ROAD, HASSAN 573 201.
...PETITIONER
(BY SRI. PRADYUMNA HEJIB,ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES,
GOOD & SERVICE TAX OFFICE - 240,
SWAMY ARCADE, OPP.HDFC BANK
KUVEMPU NAGAR, HASSAN 573 204.
Digitally signed
by 2. THE JOINT COMMISSIONER OF
LEELAVATHI S COMMERCIAL TAXES (APPEALS)
R MALNAD DIVISION,
Location: HIGH SHIVAMOGGA 577 205.
COURT OF
KARNATAKA ...RESPONDENTS
(BY SRI.HEMAKUMAR K.,AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH ORDER OF
ADJUDICATION BEARING NO. ACCT/LGSTO-240/HSN/73/16/2023-24
DATED 30/08/2023 (ANNEXURE-A) PASSED BY R1.
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
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NC: 2024:KHC:34452
WP No. 14455 of 2024
ORAL ORDER
In this petition, the petitioner seeks quashing of the impugned order of adjudication dated 30.08.2024 and for other reliefs.
2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.
3. A perusal of the impugned order will indicate that pursuant to the show-cause notice dated 13.07.2023 issued by respondent No.1, the petitioner filed a reply and on 18.07.2023 and an endorsement dated 22.08.2023 was issued by respondent No.1 calling upon the petitioner to produce documents in terms of the Circular dated 27.12.2022. Subsequently, respondent No.1 proceeded further and passed the impugned order dated 30.08.2023, aggrieved by which the petitioner filed an appeal under Section 107 of the K.G.S.T Act, which was dismissed by respondent No.2-Appellate Authority on the ground that the same was barred by limitation, aggrieved by which the petitioner is before this Court by way of the present petition.
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NC: 2024:KHC:34452 WP No. 14455 of 2024
4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the discrepancies between the between the GSTR-3B return and GSTR-2A return was due to bonafide reasons, sufficient cause and unavoidable circumstances and in the light of the Circular dated 27.12.2022 at Annexure-G, the procedure prescribed therein was to be followed and the same having not been done, the impugned order deserves to be set aside and the matter be remitted back to the concerned respondent for reconsideration afresh in accordance with law, by reserving liberty in favour of the petitioner to produce the said documents. Learned counsel further submits that while dismissing the appeal filed by the petitioner, respondent No.2 authority has not considered the aforesaid Circular and summarily dismissed the appeal only on the ground of delay without adverting to the merits of the petition and consequently, mere disposal of the appeal on the ground of delay cannot come in the way of this Court exercising its jurisdiction under Articles 226 and 227 of the Constitution of India and setting aside the impugned order. In support of is submissions, learned counsel for the petitioner places reliance upon the decision of this Court in the case of R.S. Marketing and -4- NC: 2024:KHC:34452 WP No. 14455 of 2024 Logistics Vs. The Commercial Tax Officer - W.P.No.7295/2024 dated 05.06.2024.
5. Per contra, learned AGA for the respondents would submit that there is no merit in the writ petition and that the same is liable to be dismissed.
6. Under identical circumstances, in relation to the discrepancies between GSTR-3B and GSTR-2A and noticing the Circular dated 27.12.2022, in case of R.S. Marketing and Logistics Vs. The Commercial Tax Officer - W.P.No.7295/2024 dated 05.06.2024 (supra), a co-ordinate Bench of this Court held as under:
" Petitioner has filed the present petition seeking for setting aside of the order of adjudication bearing Reference No. CTO/LGSTO-51/LR/D&R-04/2023-24 dated 02.05.2023 passed by the respondent, copy of which is produced at Annexure-A.
2. It is the case of the petitioner that there were certain discrepancies between the ITC claimed as per GSTR- 3B and GSTR-2A and noticing such discrepancies, the Authority has adjudicated and directed excess claim of ITC to be reversed.
3. It is the case of the petitioner that they were not given sufficient opportunity to explain the discrepancies. However, it is submitted that irrespective of the stand taken -5- NC: 2024:KHC:34452 WP No. 14455 of 2024 by the assessee, in light of the Circular No.183/15/2022-GST dated 27.12.2022 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing, wherever there is discrepancy in GSTR-3B and GSTR-2A, procedure is prescribed and in terms of the said procedure, the adjudicating authority ought to have followed the said procedure and non-following of such procedure has caused prejudice and accordingly, it is submitted that the matter may be remitted back for fresh consideration to the Authority, taking note of the Circular referred to above.
4. Sri. K. Hemakumar, learned Additional Government Advocate appearing for the Revenue submits that despite the reasonable opportunity being granted, the same has not been availed as is clear from the impugned order. It is further submitted that insofar as the Circular relied upon by the petitioner, the same was not relied upon in the adjudication proceedings.
5. Heard both sides.
6. For the limited purpose of the present matter, it is to be noticed that the table enclosed in the adjudication order would indicate that there is discrepancy between the ITC claimed as per GSTR-3B and GSTR-2A. The Authority has disallowed such claim only on the ground of discrepancy. It must be noticed that Circular No.183/15/2022-GST dated 27.12.2022 is made applicable specifically with respect to the financial year2017-18 as is the case herein. It is further to be noticed that where the difference of ITC claimed is less than Rs.5,00,000/-, procedure is prescribed in Paragraph No. 4.1.2. Further directions are also made out at -6- NC: 2024:KHC:34452 WP No. 14455 of 2024 paragraphNo. 4. It is clear as per Paragraph No. 6 of the Circular that the procedure to be followed is as regards all matters pending for adjudication as regards the financial year 2017-18 and 2018-19. If that were to be so, the adjudicating authority ought to have taken note of the Circular irrespective of whether the petitioner had raised such contention.
7. Accordingly, this Court is of the prima facie view that the Circular is applicable to the present facts and on such ground, the adjudication order is set aside. In so far as the contention of counsel for revenue that the applicability of the circular may also depend on the facts of the case, the said aspect is left open to be decided upon remand. The order of sending the matter back to the authority is being passed also keeping in mind the request of the petitioner to be given one more opportunity to put forth their case before the Authority.
8. Accordingly, the order at Annexure-A is set aside. The matter is remitted back for fresh consideration in terms of the observations made above. By virtue of setting aside of the adjudication order, petitioner is given another opportunity to participate in the proceedings. The petitioner who has been granted an opportunity of being heard once again, is to make an additional deposit of 10% of the tax amount as determined in the adjudication order dated 02.05.2023.
9. Accordingly, the petition is disposed off."
7. The aforesaid judgment of this Court in R.S. Marketing and Logistics Private Limited case (supra), is directly and squarely -7- NC: 2024:KHC:34452 WP No. 14455 of 2024 applicable to the facts and circumstances of the instant case and the present petition deserves to be disposed of by setting aside the impugned order and remitting the matter back to respondent No.1 for reconsideration of the matter afresh, in accordance with law.
8. In so far as the dismissal of the appeal before respondent No.2 - Appellate Authority, it is well settled that if an appeal is dismissed on the ground of delay as barred by limitation, is not an appeal in the eye of law and there would not be any merger of the original order into the order of the Appellate Authority so as to prevent this Court from exercising its jurisdiction under Articles 226 and 227 of the Constitution of India.
9. Under these circumstances, merely because respondent No.2-Appellate Authority dismissed the appeal filed by the petitioner on the ground of limitation, since there is no adjudication on merits and the appeal has been summarily dismissed only on the ground of limitation, the said order of dismissal of the appeal on 23.04.2024 as barred by limitation cannot come in the way of this Court exercising its jurisdiction under Articles 226 and 227 of the Constitution of India and as such, this contention of the respondent cannot be accepted. It is -8- NC: 2024:KHC:34452 WP No. 14455 of 2024 needless to state that the present order is passed in the peculiar/special facts and circumstances obtaining the in the instant case and the present order shall not be treated as a precedent nor shall have any precedential value for any other purpose, whatsoever.
10. In the result, I pass the following:
ORDER i. The Writ Petition is hereby allowed.
ii. The impugned order at Annexure-A dated 30.08.2023 passed by respondent No.1 is hereby set aside.
iii. The matter is remitted back to respondent No.1 for reconsideration of the matter afresh, in accordance with law.
iv. Liberty is reserved in favour of the petitioner to submit pleadings, documents etc., before respondent No.1, who shall consider the same and pass appropriate order in accordance with law.
v. It is needless to state that the present order is passed in the peculiar/special facts and circumstances obtaining in the instant case and the present order shall not be treated -9- NC: 2024:KHC:34452 WP No. 14455 of 2024 as a precedent nor shall have any precedential value for any other purpose, whatsoever.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE BMC List No.: 1 Sl No.: 40