Writ Petition No. 24798 of 2023 · The High Court
Case Details
- 1 - NC: 2025:KHC:14433 WP No. 24798 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.24798 OF 2023 (T-RES) BETWEEN: M/S TOYOTA KIRLOSKAR AUTO PARTS PVT. LTD., PLOT NO.21, BIDADI INDUSTRIAL AREA, ABBANA KUPPE VILLAGE, RAMANAGAR DISTRICT, BENGALURU RURAL – 562 109 REPRESENTED BY SHRI AKIHARU KOBAYASHI, EXECUTIVE VICE PRESIDENT AND DIRECTOR, INCORPORATED UNDER THE COMPANIES ACT, 1956 (BY SRI. RAVI RAGHAVAN, A/W SRI ROHAN KARIA AND SRI AYUSHREE JHAWAR, ADVOCATES) …PETITIONER AND: 1. UNION OF INDIA Digitally signed by CHANDANA B M Location: High Court of Karnataka REPRESENTED BY ITS UNDER SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI – 110 001. 2. STATE OF KARNATAKA THROUGH ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU – 560 001 3. ADDITIONAL COMMISSIONER OF CENTRAL TAX, BENGALURU WEST COMMISSIONERATE, 1ST FLOOR, BMTC BUILDING, BANASHANKARI, BENGALURU – 560 070. - 2 - NC: 2025:KHC:14433 WP No. 24798 of 2023 4. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT 2.9), DGSTO 02, NO.642, PIONEER PLAZA, KENCHANAHALLI MAIN ROAD, R.R.NAGARA, BENGALURU – 560 098. …RESPONDENTS
Legal Reasoning
judgment of the this Court in the M/s. Toyota Kirloskar Motor Pvt. Ltd. Vs. Union of India and others – W.P.No.22952/2023 dated 21.08.2024. 4. It is also submitted that denial of the Input Tax Credit in favour of the petitioner for the period from July 2017 – October 2022 is also illegal and arbitrary in the light of the Circular No.211/5/2024-GST dated 26.06.2024, which has been relied upon by this Court in the aforesaid judgment. It is therefore submitted that the impugned Show Cause Notice at Annexure A1 deserve to be quashed to the extent of denial of Input Tax Credit in favour of the petitioner and the matter remitted back to respondent No.3 for reconsideration afresh in accordance with law. 5. It is also submitted that the valuation for the purpose of payment of taxes plus interest is covered by Circular No.210/4/2024-GST dated 26.06.2024 and the decision of the - 5 - NC: 2025:KHC:14433 WP No. 24798 of 2023 Delhi High Court in the case of Thales India Private Limited Vs. Additional Commissioner of CGST, Audit – II, Delhi & Another – 2025 (2) TMI 245 – Delhi High Court. It is therefore submitted
Arguments
(BY SRI. PRIYANKA S.BHAT, ADVOCATE FOR R1; SMT. JYOTI M.MARADI, AGA FOR R2 & R4 SRI. JEEVAN J.NEERALGI, ADV FOR R3) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED SHOW CAUSE NOTICE BEARING NO. DCCT (AUDIT- 2.9)/GST/ADJ/2023-24 DATED 26.09.2023 ISSUED BY THE IN FORM GST DRC-01 ENCLOSED AT RESPONDENT NO.4 ANNEXURE -A DEMANDING INPUT TAX CREDIT AVAILED BY THE PETITIONER ALONG WITH INTEREST UNDER SECTION 50(1) AND 50 (3) OF THE CGST / KGST ACT, 2017 AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs: “a) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned show cause notice bearing no. DCCT (Audit- 2.9)/GST/ADJ/2023-24 dated 26.09.2023 issued by the Respondent No.4 in Form GST DRC-01 enclosed at Annexure-A demanding input tax credit availed by the Petitioner along with interest under Section 50(1) and 50(3) of the CGST/KGST Act, 2017; - 3 - NC: 2025:KHC:14433 WP No. 24798 of 2023 b) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned show cause notice bearing No.GEXCOM/AE/INV/GST/5665/2022-AE-IV (BW) dated 27.09.2023 issued by the Respondent No.3 in FORM GST DRC-01 enclosed at Annexure-A1 demanding and appropriate IGST and demanding input tax credit availed by the Petitioner along with interest and penalty. c) Hold that the Petitioner has rightly availed input tax credit of Rs.9,62,12,431/- in respect of the integrated tax paid under reverse charge mechanism on the manpower supply services received by the Petitioner during the period July 2017 to October 2022 vide Annexure-A & A1; d) Pass such further order(s) and other reliefs as the nature and circumstances of the case may require.” 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned Show Cause Notice at Annexures – A dated 26.09.2023 issued by respondent No.4 – State revenue in order to point out that even though proceedings have been initiated by respondent No.3 in - 4 - NC: 2025:KHC:14433 WP No. 24798 of 2023 November 2022, respondent No.4 – State authorities have initiated proceedings vide impugned Show Cause Notice at Annexure – A, which is barred under Section 6(2)(b) of the KGST Act and consequently, the same deserves to be quashed in the light of the
Decision
that the petition may be allowed and disposed of accordingly. 6. It is further submitted that though respondent No.3 purportedly invoked Section 74(1) of the CGST / KGST Act for the purpose of initiating proceedings vide Annexure – A1 dated 27.09.2023, the same may be treated / construed as proceedings under Section 73 of the CGST / KGST Act so as to enable the petitioner to avail the benefit of Amnesty scheme under Section 128A of the CGST Act. 7. Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 8. A perusal of the material on record will indicate that it is an undisputed fact that in November 2022, respondent No.3 had initiated proceedings / intimation under Section 70 of the CGST Act by issuing letter on 28.11.2022, which is followed by the Show Cause Notices dated 27.09.2023. Meanwhile, despite having initiated proceedings on 28.11.2022, respondent No.4 – State - 6 - NC: 2025:KHC:14433 WP No. 24798 of 2023 authorities who has issued the impugned Show Cause Notice at Annexures – A. In this context, it is pertinent to note that the said issue is answered by this Court in M/s. Toyota Kirloskar Motor Pvt. Ltd. Vs. Union of India and others – W.P.No.22952/2023 dated 21.08.2024, wherein it is held as under: “9. A perusal of the material on record and the submissions made by both sides will clearly indicate that prior to the State GST Authorities issuing the impugned Show Cause Notices at Annexures – A, A1, A2 is concerned, the Central GST Authorities had already initiated proceedings as against the petitioner and consequently, in the light of Section 6(2)(b) of the KGST Act, 2017 which contemplates a complete bar / embargo on the State GST Authorities to initiate proceedings in a situation where the Central GST Authorities had already initiated proceedings as against the petitioner in respect of the same subject matter. I am of the considered view that the impugned Show Cause Notices at Annexures – A, A1 and A2 are clearly illegal, arbitrary and without jurisdiction or authority of law and contrary to the aforesaid statutory provisions and the same deserve to be quashed.” - 7 - NC: 2025:KHC:14433 WP No. 24798 of 2023 As held in the aforesaid judgment, in view of Section 6(2)(b) of the CGST Act, Annexure A deserve to be quashed. 9. Insofar as challenge to the impugned Notice at Annexure – A1 coupled with the contention that the petitioner would be entitled to avail Input Tax Credit under Section 16(4) of the CGST / KGST Act is concerned, in the light of the aforesaid judgment of this Court, petitioner is to be relegated back to respondent No.3 for consideration of its claim in accordance with law in the light of the said decisions and the Circular No.211/5/2024-GST dated 26.06.2024. 10. Insofar as the valuation regarding payment of tax and interests are concerned, in view of Circular No.210/4/2024-GST dated 26.06.2024 even this issue would necessarily have to be decided by respondent No.3 in accordance with law and the decision of Delhi High Court in Thales India Private Limited Vs. Additional Commissioner of CGST, Audit – II, Delhi & Another – 2025 (2) TMI 245 – Delhi High Court. 11. In the result, I pass the following: ORDER (i) The petition is hereby allowed. - 8 - NC: 2025:KHC:14433 WP No. 24798 of 2023 (ii) The impugned Show Cause Notice at Annexure – A dated 26.09.2023 issued by respondent No.4 is hereby quashed. (iii) Petitioner is relegated to the stage of filing reply to the Show Cause Notice at Annexure – A1 dated 27.09.2023 before respondent No.3. (iv) Liberty is reserved in favour of the petitioner to file its reply, pleadings, documents, etc., before respondent No.3, who shall consider the same and pass appropriate orders in accordance with law bearing in mind the judgment of this Court in M/s. Toyota Kirloskar Motor Pvt. Ltd. Vs. Union of India and others – W.P.No.22952/2023 dated 21.08.2024; the decision of Delhi High Court in Thales India Private Limited Vs. Additional Commissioner of CGST, Audit – II, Delhi & Another – 2025 (2) TMI 245 – Delhi High Court; Circular No.211/5/2024-GST dated 26.06.2024 and Circular No.210/4/2024-GST dated 26.06.2024. (v) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same. - 9 - NC: 2025:KHC:14433 WP No. 24798 of 2023 (vi) Liberty is reserved in favour of the petitioner to seek the benefit of Amnesty scheme before respondent No.3 by converting the proceedings from Section 74 to Section 73 for the purpose of availing Amnesty scheme under Section 128A of the CGST Act. If such a request for availing Amnesty Scheme is made by the petitioner, the respondent No.3 shall consider the same and proceed further in accordance with law. Sd/- (S.R.KRISHNA KUMAR) JUDGE SV List No.: 2 Sl No.: 3