Paras Gold No.1 V. The Assistant Commissioner Commercial Tax (Audit)-3.10, DGSTO-03, Bengaluru and Commissioner of Commercial Taxes, Gandhinagar, Bangalore

WP/18158/2024

AI Insights

The case involves M/s. Paras Gold No.1, the petitioner, who sought to quash the assessment order and the summary of the order issued under Section 73(9) of the CGST/KGST Act, 2017, for the financial year 2018-19. The petitioner argued that due to health issues, he was unable to respond to the notices and proceedings, which led to the confirmation of tax liability, interest, and penalty by the Assessing Officer. The court considered the petitioner's medical condition and the documents submitted, including various tax and financial records, and decided to set aside the previous orders, allowing the petitioner another opportunity to present his case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 816177 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-07-2024
• Assessment Year: misc
• Laws Referred To: Constitution of India, CGST/KGST Act, 2017, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHAMANTH NAIK
• Assessee Lawyers: SANMATHI I
• Keywords: Audit report; Interest; Medical Reasons; Medical Reasons; Penalty; Show cause notice; Tax liability
• Section: 226; 227; 73(9), 44-AB

Judgement Text

" - 1 - NC: 2024:KHC:28952 WP No. 18158 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 18158 OF 2024 (T-RES) BETWEEN: 1. M/S.PARAS GOLD NO.1, KAOTHANNUR SRINIDHI LAYOUT, J. P NAGAR, 7TH PHASE BANGALORE - 560 078. …PETITIONER (BY SRI. SANMATHI E I., ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER COMMERCIAL TAX (AUDIT )-3.10, DGSTO-03, BENGALURU AND ANOTHER 2. COMMISSIONER OF COMMERCIAL TAXES, GANDINAGAR, BANGALORE - 560 001. …RESPONDENTS (BY SRI. SHAMANTH NAIK., HCGP) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE SUMMARY OF THE ORDER PASSED UNDER SECTION 73(9) OF THE CGST/KGST ACT, 2017 FOR THE PERIOD 2018-19 DATED 29/04/2024 BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-3 DGSTO-03, BENGALURU BEARING NO. ACCT(A)-3.10/A.73/ADJ.76/2023-24 (ANNEXURE-A) AND SUMMARY OF ORDER DATED 29/04/2024 BEARING REFERENCE NO. ZD2904240737426 PRODUCED AS ANNEXURE-A1. Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:28952 WP No. 18158 of 2024 THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER (PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV) Petitioner has sought for setting aside of the assessment order at Annexure-A as well as the summary of the order at Annexure-A1, by virtue of which the Assessing Officer has confirmed the tax liability, interest and penalty as proposed in DRC-01 and has issued Form GST DRC-07. 2. It is the case of the petitioner that during the relevant period of time, he was not keeping well and that presently he is in a position to make out his case as against the show cause notice by producing necessary documents which if taken on record, conclusion as arrived at by the Authority would stand modified. To demonstrate such bonafides, learned counsel for the petitioner has filed a memo along with list of documents including Audit Report under Section 44-AB of the Income Tax Act, - 3 - NC: 2024:KHC:28952 WP No. 18158 of 2024 Income Tax Return, Balance sheet for the period from 01.04.2018 to 31.03.2019, Profit and Loss Account, Form GSTR-3B, Form GSTR-9, Form GSTR-9C along with Part-B certification, Sales Report and ITC report. Petitioner has also filed medical certificate along with a memo and submits that during the relevant period of time, petitioner was not keeping well and was under treatment and the same explains his absence in responding to the proceedings before the Assessing Officer. It is further submitted that the petitioner be provided an opportunity to produce further documents to clarify the show cause notice. 3. Learned counsel for the petitioner further submits that during the audit proceedings, number of records have already been produced and draws attention to his reply at Annexure-C, wherein reliance is placed on the documents produced as Annexure-1 as well as Annexure-2 wherein reconciliation is sought to be made out. - 4 - NC: 2024:KHC:28952 WP No. 18158 of 2024 4. Perused the order at Annexure-A. The assessing officer has observed that the tax payer has not responded to the reminders or any of the notices. In light of the absence of reply, the Assessing Authority has concluded that the tax payer has not responded to the ADT-01 or reminders issued by the Department calling for books of accounts as required and the Assessing Officer is not expected to do matching without production of books of accounts. In light of the same, conclusion is arrived at by confirming the tax liability, interest and penalty as proposed in DRC-01. There is an observation made in the assessment order that though time was granted in light of health reasons made out, there was no response from the petitioner. 5. Taking note of the petitioner's reply during the process of audit at Annexure-C and noticing the Annexures produced in such reply at Annexures-1 and 2 and other documents, which would indicate that the petitioner has sought to make out reconciliation and also matching and - 5 - NC: 2024:KHC:28952 WP No. 18158 of 2024 noticing that petitioner's reasons for absence is due to medical reasons as indicated from the documents produced along with the memo before this Court, it would be appropriate to afford another opportunity to the petitioner. 6. Accordingly, the order at Annexures-A and A1 are set aside. The matter is remitted to the stage of reply to the show cause notice. However, noticing that there has been admitted lapse on the part of the petitioner which the Court has condoned by taking a lenient view, petitioner to pay nominal cost of Rs.10,000/- to the 1st respondent - Authority. Petitioner to appear before the 1st respondent on 05.08.2024. 7. Accordingly, petition is disposed off. Sd/- (S. SUNIL DUTT YADAV) JUDGE VP "