Paras Gold No.1 V. The Assistant Commissioner Commercial Tax (Audit) - 3.10, DGSTO - 03 Bengaluru and Commissioner of Commercial Taxes Gandhinagar Bangalore - 560 001

WP/18139/2024

AI Insights

The case involves M/s Paras Gold No.1, the petitioner, challenging an order passed under Section 73(1) of the KGST/CGST Act, 2017, by the Assistant Commissioner of Commercial Taxes (Audit)-3.10, DGSTO-03, Bengaluru. The petitioner contended that due to health issues, he was unable to participate in the assessment proceedings, leading to a default in producing necessary documents like books of accounts for auditing. The court noted the absence of materials indicating matching and thus entitled the petitioner to a reversal of ITC. The court decided to provide another opportunity for the petitioner to produce the required documents, acknowledging the petitioner's health issues as a valid reason for his absence during the initial proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 817297 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 16-07-2024
• Assessment Year: misc
• Laws Referred To: KGST/CGST Act, 2017, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SHAMANTH NAIK
• Assessee Lawyers: SANMATHI I
• Keywords: Assessment Order; Audit report; Books of Accounts; ITC Reversal
• Section: 44AB; 73(1); 226; 227

Judgement Text

" - 1 - NC: 2024:KHC:27954 WP No. 18139 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 18139 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 2. COMMISSIONER OF COMMERCIAL TAXES GANDHINAGAR BANGALORE - 560 001 … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER PASSED UNDER SECTION 73(1) OF THE KGST/ CGST ACT, 2017 FOR THE PERIOD 2017-18 DATED 26/12/2023 BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-3.10, DGSTO-03, BENGALURU BEARING NO. ACCT(A)- 3.10/A.NO.2366/29/08/2023 (PRODUCED AS ANNEXURE-A) AND ORDER UNDER SECTION 73 DATED 26/12/2023 BEARING REFERENCE NO. ZD291223078900A AND ETC. Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:27954 WP No. 18139 of 2024 THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question the correctness of the order at Annexure-A passed under Section 73(1) of the KGST/CGST Act, 2017. 2. It is the case of the petitioner that during the assessment proceedings, petitioner could not participate in the proceedings due to bonafide reasons as the petitioner as a Proprietor of the petitioner entity was not keeping well and had gone to his native place. 3. It is pointed out that while passing the assessment order, the conclusion of the officer as observed is as follows: \"The TP has questioned that matching mechanism of ITC has been kept in abeyance. First of all, the TP has not responded to the DT-01 or reminders issued by the Department calling for books of accounts and has failed to produce any books of accounts as required for auditing. - 3 - NC: 2024:KHC:27954 WP No. 18139 of 2024 Expecting the AO to do matching without production of books of accounts is not justifiable on the part of the TP. Hence, observations were issued based on the available information.\" 4. Accordingly, it is submitted that if the materials including books of accounts had been produced, the petitioner would have been in a position to explain the demand raised. 5. Learned counsel for petitioner has filed a memo along with the documents which include Audit Report under Section 44AB of the Income Tax Act, 1961 and other documents at Sl.No.3 to 10. 6. Learned counsel for Revenue submits that sufficient opportunity has been granted as is evidenced from the observations made in the impugned order. 7. It is further submitted that affording of sufficient opportunity itself is not in dispute. 8. Heard both sides. - 4 - NC: 2024:KHC:27954 WP No. 18139 of 2024 9. Learned counsel for petitioner has pointed out that the Assessing Officer has concluded the proceedings in the absence of materials indicating matching and hence the petitioner is entitled for reversal of ITC. The officer has concluded that the assessing officer cannot resort to matching without production of books of accounts for the tax period. 10. Learned counsel for petitioner has filed a memo which includes Audit Report under Section 44AB of the Income Tax Act, 1961, Balance Sheet for the period from 01.04.2017 to 31.03.2018, Profit & Loss Account, Form GSTR-3B, Form GSTR-9C along with Part-B Certification, Sales Report, ITC Report as well as order of cancellation and acknowledgement. 12. In light of conclusion arrived at by the Officer, it would be appropriate that the petitioner be availed of another opportunity to produce the documents which may be taken note of and appropriate orders could be passed. - 5 - NC: 2024:KHC:27954 WP No. 18139 of 2024 13. In light of the assertion that the petitioner was not keeping well and had also returned to his native place after winding up his business and accordingly he was not in a position to diligently follow up is required to be taken note of. However, in light of the lapse, the petitioner ought to be saddled with costs. 14. Accordingly, the order at Annexure-'A' is set aside. The matter is remitted for fresh consideration. Petitioner to pay cost of Rs.10,000/- to the respondents. Petitioner to appear before the first respondent on 05.08.2024. All contentions are kept open. 15. Accordingly, the petition is disposed off. Sd/- JUDGE NP "