Facts of the Case

The respondent, M/s. V Arun Kumar, a proprietary concern in Bhadravathi, Shivamogga District, Karnataka (GSTIN 29AKHPK7918A1Z4), had succeeded before a learned Single Judge in W.P.No.747/2025, which quashed a common show-cause notice issued under Sections 73 and 74 of the CGST Act, 2017 and the consequent Order-in-Original bearing OIO.No.MYS-EXCUS-000-ADC-PSM-07/2024-25 dated 03.12.2024. The Additional Commissioner of Central Tax, GST Commissionerate, Mysore, and the Union of India, aggrieved by that order dated 20.01.2026, filed the present writ appeal before the Division Bench of the Karnataka High Court under Section 4 of the Karnataka High Court Act, 1961.

Issues Involved

  1. Whether the Single Judge's order quashing the show-cause notice and Order-in-Original was sustainable in light of the Division Bench's own ruling in a connected batch of appeals decided shortly before.

Petitioner's Arguments (Revenue, as Appellant)

  • The Revenue relied on the Division Bench's own decision dated 24.04.2026 in W.A.No.1751/2024 and connected appeals, where the Court had allowed the Revenue's appeals and restored similar show-cause notices and Orders-in-Original, contending that the same reasoning should apply to the present matter.

Respondent's Arguments

  • The respondent had earlier succeeded before the Single Judge, who quashed the common show-cause notice and the consequent Order-in-Original on the merits raised in W.P.No.747/2025.

Court Order / Findings

  • The Court held that its own decision dated 24.04.2026 in W.A.No.1751/2024 and connected appeals, which restored show-cause notices and Orders-in-Original issued under Sections 73 and 74 of the CGST Act in similar circumstances, applied aptly to the present appeal as well.
  • Since the Order-in-Original had been passed pursuant to a show-cause notice under Sections 73 and 74 of the Act, the Court considered it appropriate to grant the respondent liberty to pursue the statutory appellate remedy within a time to be fixed by the Court.
  • The writ appeal was allowed, the Single Judge's order dated 20.01.2026 was set aside, and the Order-in-Original along with the show-cause notice was restored; the respondent was given six weeks to file a statutory appeal, during which period the Revenue would not raise a limitation objection, and the Appellate Authority was directed to hear the appeal on merits if filed within that time.

Important Clarification

Where a Division Bench has already settled, in a connected batch of appeals, that show-cause notices and Orders-in-Original under Sections 73/74 of the CGST Act quashed by a Single Judge on a particular ground ought to be restored, that ruling will be applied to subsequent, similarly placed appeals; the assessee's remedy in such cases is redirected to the statutory appellate forum, with protection from a limitation objection for a specified window.

Sections Involved

  • Section 73 of the CGST Act, 2017 – governs determination of tax not paid/short paid for reasons other than fraud.
  • Section 74 of the CGST Act, 2017 – governs determination of tax not paid/short paid by reason of fraud, wilful misstatement or suppression.
  • Section 4 of the Karnataka High Court Act, 1961 – provides the intra-court appeal remedy invoked by the Revenue.

Decision – In Favour of

The decision was in favour of the Department/Revenue, with the show-cause notice and Order-in-Original restored, though the assessee was left free to contest the matter on merits before the statutory Appellate Authority within the extended, limitation-protected window.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case Number: Writ Appeal No. 1175 of 2026 (T-RES), arising from W.P.No.747/2025 (T-RES)
  • Neutral Citation: 2026:KHC:23085-DB
  • Coram: Hon'ble Mr. Justice S.G. Pandit and Hon'ble Mr. Justice K.V. Aravind
  • Date of Order: 25 April 2026

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