Sri Laxmi Borewell Agencies Vs Assistant Commissioner of Central Tax (Karnataka High Court)
The petitioner filed a writ petition challenging Form GST SPL-07 dated 03.11.2025, by which the waiver application filed in Form GST SPL-02 was rejected. The petitioner also sought directions to accept the waiver application and issue Form GST SPL-05, along with quashing of the show cause notice dated 27.09.2023, summary of show cause notice in Form DRC-01 dated 30.09.2023, and the Order-in-Original dated 28.12.2023 passed under Section 73 of the CGST/KGST Act, 2017.
The petitioner was engaged in the business of drilling bore wells and was registered under GST. During an audit conducted by the Hubli Audit Circle for the period July 2017 to 2020, the department observed that the petitioner was engaged in both taxable and exempt supplies. According to the department, common input and input services were used for both categories of supplies, attracting Section 17(2) of the Act, which restricts Input Tax Credit in such cases.
The revenue determined that common Input Tax Credit amounting to Rs.62,46,056/- was liable to be reversed. The petitioner accepted the audit observations and paid the amount through DRC-03 forms dated 20.09.2023. However, the petitioner did not pay the interest component. Thereafter, a show cause notice dated 27.09.2023 was issued. The petitioner responded through email and Form DRC-06.
