M/S. Nl Tile Art Private Limited v. Additional Commissioner of Commercial Taxes (Smr-2),

ORDER

(1) The petition is hereby allowed.

(ii) The impugned order in Revision at Annexure - A dated

14.05.2025 passed by the respondent is hereby quashed.

(iii) Liberty is however reserved in favour of the respondent to initiate proceedings against the petitioner in accordance with law subject to all just exceptions and limitations as permissible in law."

¶4In view of the aforesaid facts and circumstances and the judgment of this Court in M/S. NAVAYUGA ENGINEERING COMPANY LIMITED (referred supra), I deem it just and appropriate to quash the impugned show cause notice by granting liberty in favour of the respondent.

¶5Insofar as the contentions of the respondent that petition is premature since the proceedings are at the stage of issuance of show cause notice under Section 108 of KGST Act, for the purpose of initiating revision proceedings is concerned, having regard to the provisions contained under Section 65 (7) of KGST Act, 2017 and the judgment of this Court in M/S. NAVAYUGA ENGINEERING COMPANY LIMITED (referred supra), it is clear that Section 108

of the Act cannot be invoked and cannot be applicable to initiate revision proceedings purporting to revise an audit observation report which is impermissible in law and without jurisdiction of the authority of law and consequently, the very issuance of the show cause notice being without jurisdiction of authority of law, mere availability of remedy by way of submitting reply to the show cause notice would not come in the way of this Court exercising under Article 226 in the light of the several judgments of the Apex Court and this Court, including the case of RADHA KRISHAN INDUSTRIES VS. STATE OF HIMACHAL PRADESH REPORTED IN Taxman (2021) 127 ATAXMANN.COM.26 (SC). Under these circumstances, the said contentions urged by the respondent cannot be accepted.

¶6In the result, I pass the following: ORDER

(i) Petition is hereby allowed;

(ii) The impugned Notice bearing No.ADCOM(SMR)- 2/SMR-14/2025-26 at Annexure - A dated 05.11.2025 passed by the respondent is hereby quashed.

(iii) Liberty is however reserved in favour of the respondent to initiate proceedings against the petitioner in accordance with law subject to all just exceptions and limitations as permissible in law."

Sd/- (S.R.KRISHNA KUMAR) JUDGE

tsn* List No.: 2 Sl No.: 11

NC:(2025:KHC:54224( WP(No.(38051(of(2025( ( , ,,HC-KAR( ( ( IN THE HIGH COURT OF KARNATAKA AT BENGALURU TH DATED THIS THE 18 DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 38051 OF 2025 (T-RES) BETWEEN: M/S. NL TILE ART PRIVATE LIMITED, SURVEY NO. 21/1, BETTADASANAPURA, BEGUR -2, BENGALURU - 560 068. (REP. BY NAVEEN KUMAR B S, AGED ABOUT 43 YEARS, S/O B N SRINIVAS, DIRECTOR OF PETITIONER COMPANY) …PETITIONER (BY SRI RAGHAVENDRA C R, ADVOCATE) AND: ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (SMR-2), TH8 FLOOR, VTK-1, GANDHINAGAR, BANGALORE - 560 009. …RESPONDENT (BY SRI K HEMA KUMAR, AGA) Digitallytisigned by0NANDINI0R Location:0H IGH COURT0OF THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE KARNATAKA CONSTITUTION OF INDIA PRAYING TO-QUASH THE IMPUGNED REVISIONARY NOTICE BEARING NO. ADCOM(SMR)-2/SMR-14/2025-26 DATED 05.11.2025 ISSUED BY THE RESPONDENT, ENCLOSED AS ANNX- A FOR THE RASONS STATED IN THE GROUNDS ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER 1. In this petition, the petitioner seeks the following reliefs: "WHEREFORE, the Petitioner prays this Court may be pleased to grant the following reliefs: i). Issue a writ of certiorari or any other writ or direction or order to quash the impugned revisionary notice bearing No. ADCOM (SMR)-2/SMR-14/2025-26 dated 05.11.2025 issued by the Respondent, enclosed as Annexure A, for the reasons stated in the grounds. (ii) To issue order or direction or writ in the nature of mandamus holding that invocation of revisional powers by the Respondent to issue the impugned notice dated 05.11.2025 under Section 108(1) of the CGST/KGST Act against an audit report is incorrect and without authority of law. (iii) Grant such other consequential reliefs, as this Honourable High Court may think fit including refund of amounts already paid with interest and the cost of this writ petition." 2. Heard learned counsel for the petitioner and learned AGA for respondent and perused the material on record. 3. A perusal of the material on record will indicate that pursuant to the Audit Reports dated 06.12.2022 and 22.02.2023, respondent has proceeded to issue impugned show cause notice purportedly to initiate revision proceedings under Section 108 of KGST/CGST Act, 2017, purporting to revise the Audit report dated 22.02.2023 which is impermissible in law in the light of the judgment of this Court, in the case of M/S. NAVAYUGA ENGINEERING COMPANY LIMITED VS. JOINT COMMISSIONER OF COMMERCIAL TAXES (DD 18.11.2025), wherein, it is held as under: ORAL ORDER "In this petition, petitioner seeks the following reliefs: (a) To issue order(s), directions, writ(s) in the nature of Certiorari or any other writ quashing the Impugned Order in Revision bearing No. JCCT(ADMN)/DGSTO-6/GST/SMR- 03/2025-26 dated 14.05.2025 passed by the Respondent is enclosed at Annexure-A as being without jurisdiction; (b) To issue order(s), directions, writ(s) in the nature of mandamus or any other writ holding that the provisions of Section 15(2) of the CGST Act to determine the value of supply is inapplicable to the facts and of the present case; (c) To issue order(s), directions, writ(s) in the nature of mandamus holding that invocation of revisional powers by the Respondent to pass the Impugned Order under Section 108(1) f the CGST Act against an Audit Report is incorrect and without Authority of law; (d) To issue order(s), directions, writ(s) in the nature of certiorari or any other writ holding that the interest Section 50 of the CGST/SGST Act, 2017 and penalty under Section 73(9) of CGST/SGST Act, 2017 is not leviable; (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 circumstance of the case in the interest of justice;" 2. Heard learned Senior Counsel for the petitioner and learned counsel for the respondent a