Yashodhara Super Speciality Hospital Private Limited Vs Joint Commissioner of Commercial Taxes (Appeals) & Another (Karnataka High Court, Kalaburagi Bench)
Summary: The Karnataka High Court, Kalaburagi Bench, allowed the writ petition filed by M/s Yashodhara Super Speciality Hospital Private Limited, operating as M/s Rajlaxmi Medical Center, against an ex parte GST demand of ₹22,67,000 and the rejection of its appeal on limitation. The petitioner, engaged in providing healthcare services, had obtained cancellation of its GST registration with effect from 15 September 2021. The tax officer subsequently initiated scrutiny proceedings for FY 2017-18, followed by proceedings under Section 73. The Court recorded that there was no material establishing service of the show cause notice dated 29 September 2023 through the GST portal, RPAD or email as required under Section 169 of the GST Act. The petitioner maintained that neither the notice nor the assessment order had been communicated and that it learnt of the proceedings only through a telephone call concerning recovery. Its subsequent appeal was dismissed for delay.
Considering the absence of an effective opportunity to contest the proceedings, the petitioner’s deposit of 10% of the tax demand while filing its appeal, and three similar orders of the Court, the High Court held that the petitioner should receive an opportunity to file objections and have the matter reconsidered on merits. It set aside the assessment order dated 22 December 2023 and the appellate order dated 30 July 2025. The petitioner was directed to appear before the tax officer on 26 October 2026, when a copy of the show cause notice was to be furnished. Three weeks from that date were allowed for submitting objections and supporting documents. The officer was directed to hear the petitioner and pass an appropriate order in accordance with law. The relief was confined to fresh adjudication; the Court did not determine the underlying tax liability on merits. No costs were awarded.
Cases Discussed
- W.P. No. 201477/2025 (T-RES), decided on 15 September 2026 — Shri Amoghasiddeshwar Civil and Engineering Works v. Deputy Commissioner of Commercial Taxes (AUDIT-1) (Karnataka High Court).
- W.P. No. 34351/2024 (T-RES), decided on 8 January 2025 — Ebix Smartclass Educational Services (P.) Ltd. v. Commercial Tax Officer, Bengaluru (Karnataka High Court).
- W.P. No. 101042/2024 (T-RES), decided on 1 August 2024 — Vulcan Metallurgical Works v. Joint Commissioner of Commercial Taxes (Appeals), Belagavi (Karnataka High Court).
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This writ petition is filed seeking the following prayers:
“i) To issue a Writ of Certiorari quashing the impugned Order-In-Appeal dated 30.07.2025 bearing Appeal No. GST-556/2024-25 along with Form GST APL-02 dated 31.07.2025 bearing Reference No. ZD290725129988H is passed by the Respondent No.1 (Annexure-A); and,
ii) To issue a Writ of Certiorari quashing the impugned Order-In-Original dated 22.12.2023 bearing No. CTO/LGSTO-440/DRC-07/VJP/23-24/B-13497 along with Form GST DRC-07 dated 30.12.2023 bearing Reference No. ZD2912230981549 passed by the Respondent No.2 (Annexure-B); and,
iii) To issue a Writ of Mandamus directing the Respondent No.2 to provide a copy of the Show Cause Notice dated 29.09.2023 bearing No. CTO/LGSTO-440/DRC-01/VJP/23-24/B-3847 to the Petitioner; and,
iv) To issue a Writ of Mandamus directing the Respondent No.2 to reconsider the matter in fresh adjudication from the stage of post Show Cause Notice in accordance with law, while providing Petitioner an opportunity of being heard and reserving liberty to the Petitioner to urge all contentions; and,
v) To issue Order(s), Directions, Writ(s) or any other relief as this Hon’ble Court deems it fit and proper in the facts and circumstance of the case in the interest of justice and equity.”
2. Heard Ms.Lochana S. Babu, learned counsel appearing for the petitioner, the learned Additional Government Advocate for the respondents and meticulously perused the material available on record.
3. The petitioner is a private limited company registered under the Provisions of the Companies Act, 1956 and is engaged in the business of providing healthcare services. It has registered itself under the provisions of the Central Goods and Services Tax Act, 2017 (for short ‘the GST Act’). Later, the petitioner applied for cancellation of its GST registration, which was accepted, and the registration was cancelled with effect from 15.09.2021.
4. Respondent No.2 initiated scrutiny proceedings for the Financial Year 2017-18 and issued Form GST ASMT-10 under Section 61 of the GST Act read with Rule 99 of the Central Goods and Services Tax Rules, 2017 (for short ‘the GST Rules’). The impugned order indicates that respondent No.2 thereafter issued Form GST DRC-01A under Section 73(5) of the GST Act read with Rule 142(1A) of the GST Rules. The said impugned order was not communicated to the petitioner. Thereafter, on 29.09.2023, respondent No.2 issued a show cause notice under Section 73(1) of the GST Act read with Rule 142(1)(a) of the GST Rules to the petitioner. However, there is no material on record to indicate that the said notice was served on the petitioner through GST portal, RPAD or e-mail, as required under Section 169 of the GST Act. Respondent No.2, without affording an opportunity to the petitioner, passed an exparte impugned order, confirming a tax demand of Rs.22,67,000/-.
5. It is the case of the petitioner that neither the show-cause notice nor the impugned order was communicated to the petitioner. Thereafter, respondent No.2 issued Form GST DRC-07 – summary of the impugned order, on 30.12.2023. It was only when the petitioner received telephonic communication from the jurisdictional GST Officer, the petitioner came to know about the initiation of the recovery proceedings and passing of the impugned order. The records indicate that the petitioner preferred an appeal before the Appellate Authority. However, the Appellate Authority dismissed the appeal on the ground of delay.
6. It is to be noticed that the petitioner is specifically contending that, the petitioner’s GST registration was cancelled on 15.09.2021. Thereafter, scrutiny proceedings of the Financial Year 2017-18 were initiated and concluded by passing of the impugned order, without issuance of notice and without hearing the petitioner.
7. Taking note of the grounds urged in the petition, I am of the considered view that the petitioner needs to be provided one opportunity to place its defense by filing the objections to the show-cause notice. Thereafter, the authority is required to reconsider the case against the petitioner on merits and in accordance with law.
8. It is further to be noticed that the petitioner while filing an appeal has deposited 10% of the tax demand under the impugned order. Considering the same and taking note of the similar orders passed by this Court in the cases of Ebix Smartclass Educational Services (P.) Ltd. V. Commercial Tax Officer, Bengaluru1, Vulcan Metallurgical Works v. Joint Commissioner of Commercial Taxes (Appeals), Belagavi2 and Shri Amoghasiddeshwar Civil and Engineering Works v. Deputy Commissioner of Commercial Taxes (AUDIT-1)3. Accordingly, I proceed to pass the following:
ORDER
i. The writ petition is allowed.
ii. The impugned orders dated 22.12.2023 at Annexure-B passed by respondent No.2 and 30.07.2025 at Annexure-A passed by respondent No.1 are hereby set aside.
iii. The respondent No.2 is directed to furnish a copy of the show cause notice to the petitioner, on petitioner appearing before the respondent No.2 on 26.10.2026.
iv. The petitioner is granted three (3) weeks time from 26.10.2026 to file objections/reply along with the documents to the show cause notice.
v. The respondent No.2 is directed to provide opportunity and hear the petitioner and pass appropriate orders in accordance with law.
No order as to costs.
Notes:
1 WP.No.34351/2024 (T-RES) dt. 08.01.2025
2 WP.No.101042/2024 (T-RES) dt 01.08.2024
3 WP.No.201477/2025 (T-RES) dt. 15.09.2026
