Facts of the Case

M/s. Shivaji Manohar Rathod, trading as Jai Bhavani Constructions, challenged a Recovery Notice dated 17.07.2025, the underlying Order-in-Original dated 08.09.2022 (bearing a DIN), and the show cause notice dated 27.04.2021 that preceded it, before the Karnataka High Court.

Issues Involved

  1. Whether the impugned Order-in-Original and the consequent Recovery Notice were sustainable, or whether the matter fell within the framework already laid down by the Court in an earlier batch matter for similarly placed taxpayers.
  2. Whether the dispute ought to be relegated to the designated officer for reconsideration from the stage of the show cause notice.

Petitioner's Arguments

  • The petitioner sought quashing of the Recovery Notice, the Order-in-Original and the underlying show cause notice, urging that the controversy was directly covered by the Co-ordinate Bench's ruling in M/s. Karnataka Chinmaya Seva Trust v. Joint Commissioner of Central Tax (WP No.11154/2023 & connected matters).

Respondent's Arguments

  • The Revenue urged several contentions in support of the impugned proceedings, though the Court found the controversy squarely covered by the earlier batch ruling.

Court Order / Findings

  • The Court held that the controversy was directly and squarely covered by its earlier decision in M/s. Karnataka Chinmaya Seva Trust, where writ petitions challenging Orders-in-Original were disposed of by setting aside such orders and relegating the matters to officers to be designated, for reconsideration from the stage of the show cause notice, with liberty to the petitioners to file pleadings, and with pending demands consequent to the impugned orders also set aside.
  • Applying that framework, the Court quashed the impugned Order-in-Original dated 08.09.2022 and the Recovery Notice dated 17.07.2025, and remitted the matter to the concerned respondent to proceed from the stage of the show cause notice, in accordance with law.

Important Clarification

  • Where a Karnataka GST dispute is factually aligned with the batch framework laid down in Karnataka Chinmaya Seva Trust, an Order-in-Original and any consequent recovery action are liable to be set aside and the matter reconsidered afresh from the stage of the show cause notice by a designated officer, rather than being independently re-litigated on its individual facts.

Sections Involved

  • Sections 73/74 of the CGST/KGST Act, 2017 — the adjudication framework under which the SCN and OIO were issued.
  • Chapter XV of the CGST Act, 2017 — governs recovery of tax, under which the impugned Recovery Notice was issued and subsequently unwound.

Decision – In Favour of

Assessee. The Order-in-Original and Recovery Notice were quashed, with the matter remitted to the post-show-cause-notice stage.

Case Details

High Court of Karnataka at Bengaluru; WP No. 37590 of 2025 (T-RES); Coram: Justice S.R. Krishna Kumar; Order dated 12.12.2025.

Link to Download the Order

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