Velankani Information Systems Private Limited Vs. Joint Commissioner of Central Tax And Others (Karnataka High Court)
Material Facts
The petitioner challenged the adjudication order dated 30.03.2026 passed under Section 74 of the Central Goods and Services Tax Act, 2017 and the consequential demand for the tax periods from 2019-20 to 2022-23.
Procedural History
The writ petition questioned the adjudication order under Section 74 of the CGST Act. The petitioner sought interim relief before the Karnataka High Court.
Legal Issue(s)
- Whether proceedings based on a common notice covering different tax periods warranted interference.
- Whether proceedings arising from mismatch between Forms GSTR-2A and GSTR-3B were sustainable where taxes had been paid to suppliers and transactions were genuine.
- Whether the petitioner was entitled to Input Tax Credit on tax paid for machinery and equipment used in construction of commercial buildings leased out on rent.
Relevant Statutory Provisions
- Section 74 of the Central Goods and Services Tax Act, 2017.
Petitioner’s Submissions
The petitioner submitted that:
- The adjudication was based on a common notice covering different tax periods. Although a Division Bench had decided the issue against the registered taxpayer, the matter was pending before the Supreme Court. It was also pointed out that in W.P. No.14323/2026, this Court had observed that if the Supreme Court decided the issue in favour of the registered taxpayer, the proceedings would be without jurisdiction.
- The proceedings arose due to a mismatch between Forms GSTR-2A and GSTR-3B despite taxes having been paid to suppliers. Relying on Instakart Services Private Limited v. Union of India, it was contended that where transactions are genuine and declared in GSTR-3B, proceedings should not be initiated merely because of a supplier’s failure or infraction.
- As the petitioner constructed commercial buildings that were leased out, it claimed entitlement to ITC on tax paid to suppliers, including those supplying machinery and equipment. Reliance was placed on the interim order dated 04.06.2026 passed in W.P. No.14922/2026.
The petitioner further submitted that the disputed ITC relating to the third ground constituted approximately 8% to 9% of the total disputed ITC.
Paid content
Become a Basic or Premium Member, or log in if you are already a Basic or Premium member.
