Case Law Details
Smt. Nelamangala Rajagopal Amrutha Vs Union of India (Karnataka High Court)
Material Facts
The petitioner challenged the adjudication order dated 13.04.2024 passed under Section 73 of the Central Goods and Services Tax Act, 2017 and the consequential demand dated 26.04.2024. The principal question before the Court was whether the adjudication proceedings should be restored to the second respondent to enable the petitioner to file a response after being given an opportunity of hearing.
The proceedings had been initiated on the ground that the petitioner was not entitled to avail Input Tax Credit (ITC) as the returns in Form GSTR-3B had been filed belatedly.
Procedural History
A Show Cause Notice was issued to the petitioner. The petitioner did not submit any response. The adjudication order also recorded that communications regarding personal hearing had been issued through the GST portal but were not availed by the petitioner. Consequently, the adjudication order and demand were passed, which were challenged before the Karnataka High Court.
Legal Issue(s)
- Whether the adjudication order under Section 73 of the CGST Act and the consequential demand should be quashed to provide the petitioner an opportunity to respond.
- Whether the petitioner’s claim for ITC based on Section 16(5) of the CGST Act required consideration by the adjudicating authority.
Relevant Statutory Provisions
- Section 73 of the Central Goods and Services Tax Act, 2017.
- Section 16(5) of the Central Goods and Services Tax Act, 2017.
Petitioner’s Submissions
The petitioner submitted that:
- She could not respond to the Show Cause Notice or avail the opportunity of personal hearing as she was not computer literate and was unaware of the notices uploaded on the portal.
- On merits, she intended to rely upon Section 16(5) of the CGST Act and contended that, by virtue of the amendment with effect from 01.07.2017, she would be entitled to claim ITC on returns filed before 30.11.2021.
Court’s Findings and Reasoning
The High Court observed that the petitioner could not be said to be acting mala fide in asserting that she lacked computer literacy. The Court also noted that, if Section 16(5) of the CGST Act was applicable, the petitioner would be entitled to seek ITC. It held that this aspect required consideration by the second respondent.
Accordingly, the Court found it appropriate to interfere with the impugned adjudication order.
Final Ruling
The Karnataka High Court partly allowed the petition, quashed the adjudication order dated 13.04.2024 and the consequential demand dated 26.04.2024, and restored the matter for fresh consideration. It directed the petitioner to appear before the second respondent on 23.07.2026, without further notice, and file all documents in support of her case.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the Adjudication Order under Section 73 of the Central Goods and Services Tax Act, 2017 [for short, the ‘CGST Act] dated 13.04.2024 [Annexure-B] and the consequential Demand dated 26.04.2024 [Annexure-C. 1. The petitioner has also sought for certain other reliefs but the essential question for consideration is: should this Court interfere with the aforesaid Adjudication order and Demand to restore the proceedings to the second respondent for due consideration with opportunity to the petitioner to file response?.
Ms. Shyamala V Devagiri, the learned counsel for the petitioner, and Sri Jeevan J Neeralgi, the learned Standing Counsel for the respondents, are heard for disposal of the petition. The proceedings are commenced on the ground that the petitioner could not have availed Input Tax Credit [Ng because it has filed its returns in GSTR-3B belatedly. The petitioner is issued with Show Cause Notice but she has not responded. The order also records that the personal hearing communications were addressed to the petitioner on the portal but she has not availed such opportunity.
However, the petitioner asserts that because she is not computer literate she was not in the know of the notices issued; and on merits, the petitioner proposes to rely upon Section 16[5] of the CGST Act to contend that with the incorporation of this clause by amendment in the year 2017 with effect from 01.07.2017, she would be entitled to ITC on any return that is filed before 30.11.2021. This Court is of the view that the petitioner cannot be said to be acting mala fide in asserting lack of computer literacy and crucially would be entitled to seek ITC if Section 16[5] of the CGST Act would be applicable. The second respondent will have to consider the same and hence this Court interferes with the impugned adjudication order by the following;
ORDER
The petition is allowed in part and the impugned Order of Adjudication dated 13.04.2024 [Annexure-B] and the demand dated 26.04.2024 [Annexure-C] are quashed. The petitioner shall, without further notice, appear before the second respondent on 23.07.2026 and file all documents to substantiate her case.
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