Sri Lakshmi Agencies Vs State of Karnataka (Karnataka High Court)
In this writ petition, the petitioner challenged a show-cause notice dated 28 February 2023 and the subsequent impugned order dated 11 January 2024 passed under Section 73 of the CGST/KGST Acts for the financial year 2018-19. The proceedings concerned the alleged ineligibility of Input Tax Credit (ITC) availed under Section 16(2) of the CGST Act. The petitioner filed its reply to the show-cause notice on 21 March 2023. However, the respondent authority passed the assessment order without considering the petitioner’s reply and without granting a personal hearing under Section 75(4) of the Act.
The petitioner argued that the impugned order was therefore procedurally flawed and sought quashing of the order with directions for fresh adjudication. The respondents contended that there was no merit in the petition and maintained that the petitioner had not exercised due diligence in participating in the proceedings.
Upon reviewing the records, the Karnataka High Court found it undisputed that the petitioner had submitted a reply to the show-cause notice and was not given a reasonable opportunity to produce relevant documents or be heard. Adopting a justice-oriented approach, the Court set aside the impugned order and remitted the matter back to the respondent authority for fresh consideration in accordance with law.
