Sanvi Creations Vs Commercial Tax Officer (Karnataka High Court)
Summary: Karnataka High Court disposed of the writ petition filed by Sanvi Creations challenging the GST Audit Report dated 31.08.2026 and subsequent Show Cause Notice in Form GST DRC-01 dated 02.09.2026. The petitioner contended that the Commercial Tax Officer had issued the show cause notice without considering its detailed objections dated 30.07.2026 to the audit observations, thereby exposing it to adjudication without complete examination of its case.
The Revenue submitted that the audit was intended to examine whether proceedings under Sections 73 or 74 of the KGST/CGST Act were warranted and that any failure to consider the objections at the audit stage could be addressed during adjudication by filing a detailed response and seeking a personal hearing under Section 75(4). The High Court found considerable force in the Revenue’s submission, observing that issuance of the show cause notice itself provided the petitioner an opportunity to contest the proposed demand and seek a personal hearing.
Considering that the original deadline for reply was 01.10.2026, the Court granted further reasonable time and permitted the petitioner to submit a detailed response with documents by 23.10.2026. The petitioner was also given liberty to seek a personal hearing under Section 75(4), which the first respondent was directed to provide. The authority was further directed to conclude the proceedings by cogent reasons.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the first respondent’s Audit Report dated 31.08.2026 [Annexure-D] and the subsequent Show Cause Notice in Form GST DRC-01 dated 02.09.2026 [Annexure-E] with a request for direction to the first respondent to consider the petitioner’s objections dated 30.07.2026 to the audit observations.
2. Sri. Sreehari Kutsa, and Sri. Kiran Naidu, the learned counsels for the petitioner, submit that this Court must intervene because the first respondent, without considering the petitioner’s detailed response to the audit observations, has caused the show cause notice; and the learned counsels emphasize that the failure to consider the petitioner’s objections to the audit observation exposes the petitioner to an adjudication without a complete examination of the petitioner’s case.
3. Ms. Jyoti M. Maradi, the learned High Court Government Pleader who accepts notice for the respondents, submits that the audit is only to examine whether there is any cause for proceedings under Sections 73 or 74 of the Karnataka Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 (‘the KGST/CGST Act’ for short), and even if there is any failure to consider the petitioner’s objections to the audit observation, the petitioner can, in filing a detailed response, and requesting for a personal hearing as is contemplated under Section 75(4) of the KGST/CGST Act, can avail of opportunity and demonstrate that there can be no confirmation of the proposition or the demand flowing from such proposition.
4. These rival positions are carefully considered for interference, and this Court finds considerable force in the submissions by Ms. Jyothi M. Maradi. The petitioner indeed has an opportunity under the Show Cause Notice dated 02.09.2026 to show cause against the proposed demand and even seek a personal hearing to vindicate its cause against the confirmation of the demand in the adjudication process. The petitioner is extended an opportunity with the issuance of the show cause notice to file a reply until 01.10.2026 and this Court is of the view that with the present petition, the petitioner must have a further reasonable time.
5. Hence, the petition stands disposed of, permitting the petitioner to file a detailed response to the propositions in the show cause notice by 23.10.2026 observing that the petitioner will be at liberty to seek a personal hearing as envisaged under Section 75(4) of the KGST/CGST Act and the first respondent shall extend such opportunity. It is needless to observe that the petitioner shall file a response with documents as now permitted by 23.10.2026, without further notice and that the first respondent must conclude the proceedings by cogent reasons.
