Pokala Malleswara Reddy Vs Commercial Tax Officer (Karnataka High Court)
The petitioner challenged the Adjudication Order dated 24.02.2026 passed under Section 74(9) of the Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017, along with the summary of the order. The adjudication followed proceedings initiated after a mismatch between Form GSTR-3B and Form GSTR-2A.
The Joint Commissioner of Commercial Taxes had issued summons on 20.01.2025, calling upon the petitioner to explain the mismatch. Although the petitioner’s representative appeared, no response was filed, resulting in a Show Cause Notice dated 30.09.2025 in Form GST DRC-01 proposing proceedings under Section 74 of the Act.
The petitioner contended that the authorities could invoke Section 74 only by alleging acts amounting to fraud or wilful misstatement, but the show cause notice contained no such allegation. It was also submitted that while the proceedings related to the period April 2019 to March 2020, a notice had been issued for the subsequent period April 2020 to March 2021 under Section 73, and Section 74 had been invoked only to overcome limitation.
The High Court observed that the show cause notice did not refer to any circumstance from which an allegation of fraud or deliberate suppression could be inferred. It also recorded that the Additional Government Advocate could not dispute that the notice was completely silent regarding fraud or deliberate suppression, which were jurisdictional facts for assuming jurisdiction under Section 74. The Court held that the writ petition had to succeed on the ground of lack of jurisdiction.
