Facts of the Case

The respondent, M/S. Hotel Pai Vista (a unit of Pai Vaibhav Hotels India Pvt. Ltd., GST Registration No.29AAACP9282G3ZZ), had succeeded before a learned Single Judge in W.P.No.38277/2025, dated 17.12.2025, which quashed a common show-cause notice dated 20.06.2025 issued under Section 74 of the CGST Act, 2017 and the consequent Order-in-Original dated 03.12.2025. The Additional Commissioner of Central Tax, GST Commissionerate, Mysuru, aggrieved by that order, filed the present writ appeal under Section 4 of the Karnataka High Court Act before the Division Bench.

Issues Involved

  1. Whether the Single Judge's order quashing the show-cause notice and Order-in-Original was sustainable, having regard to the Division Bench's own coordinate ruling in a connected batch of appeals.

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, which restored similar show-cause notices and Orders-in-Original in comparable circumstances, contending the same reasoning ought to apply here.

Respondent's Arguments

  • The respondent had succeeded before the Single Judge, who quashed the common show-cause notice under Section 74 of the CGST Act and the consequent Order-in-Original on the grounds raised in W.P.No.38277/2025.

Court Order / Findings

  • The Court held that its own decision dated 24.04.2026 in W.A.No.1751/2024 and connected appeals, restoring show-cause notices and Orders-in-Original under Section 74 of the CGST Act in similar circumstances, aptly applied to the present appeal, and accordingly restored the impugned notice and order.
  • Having regard to the limited power of the appellate authority to condone delay, and noting that the respondent had been diligently pursuing its remedy through the writ petition, the Court granted the respondent six weeks from the date the order is uploaded to avail the statutory appellate remedy, without the Revenue raising any limitation objection if the appeal is filed within that period.
  • The writ appeal was allowed, the Single Judge's order dated 17.12.2025 was set aside, and the Order-in-Original dated 03.12.2025 along with the show-cause notice dated 20.06.2025 was restored, with the Appellate Authority directed to hear the appeal on merits if filed within the stipulated 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 Section 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 — with the assessee's remedy redirected to the statutory appellate forum and protected from a limitation objection for a court-fixed window, especially where the assessee has been diligently pursuing its remedy.

Sections Involved

  • Section 74 of the CGST Act, 2017 – governs determination of tax not paid/short paid by reason of fraud, wilful misstatement or suppression of facts.
  • 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 limitation-protected window.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case Number: Writ Appeal No.1108 of 2026 (T-RES), arising from WP No.38277/2025
  • Neutral Citation: 2026:KHC:23114-DB
  • Coram: Hon'ble Mr. Justice S.G. Pandit and Hon'ble Mr. Justice K.V. Aravind
  • Date of Order: 24 April 2026

Link to Download the Order

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