Facts of the Case

The petitioner, Shri Nagareddy Umesh Reddy, a contractor represented by its proprietor Shri Umesh N. Reddy, challenged a chain of proceedings initiated against him by the service tax/central GST authorities at Belagavi. A show-cause notice bearing SCN No.520/2021-ST dated 23.04.2021 was issued by the third respondent, culminating in an Order-in-Original dated 26.03.2022 passed by the second respondent (No.BEL-EXCUS-000-GLB-DIV-ADC-KRR-52/2021-22). The petitioner's appeal against this order was disposed of by an Order-in-Appeal dated 12.03.2025 passed by the first respondent, the Commissioner (Appeals), Office of the Commissioner of Central GST and Central Excise (Appeals), Belagavi. In the meanwhile, the fourth respondent, the Superintendent of Central Tax and Central Excise, Yadgir Range, had also issued a garnishee order dated 13.02.2023 (OC No.22/2023) to recover the disputed amount. Aggrieved by this entire sequence, the petitioner approached the Karnataka High Court, Kalaburagi Bench, under Articles 226 and 227 of the Constitution, seeking to quash the show-cause notice, the Order-in-Original, the Order-in-Appeal and the garnishee order, and for the appeal to be remitted for fresh consideration on merits in light of decisions rendered in identical matters.

Issues Involved

  1. Whether the show-cause notice, the consequential Order-in-Original, the Order-in-Appeal and the garnishee order issued against the petitioner deserved to be quashed in light of a coordinate ruling on an identical issue.
  2. Whether the petitioner should be relegated to filing a fresh reply to the show-cause notice before the appropriate officer, consistent with the directions issued in the earlier binding decision.

Petitioner's Arguments

  • The issue raised in the writ petition was squarely covered by the decision of the Principal Bench at Bengaluru in W.P.No.11154/2023 (T-IT) and connected matters, disposed of on 03.07.2024, in the matter of M/s Karnataka Chinmaya Seva Trust vs Joint Commissioner of Central Tax and Another.
  • The petitioner sought quashing of the show-cause notice, the Order-in-Original, the Order-in-Appeal and the garnishee order, and a further direction permitting a fresh reply to be filed and considered afresh.

Respondent's Arguments

  • Counsel for the respondents jointly agreed with the petitioner that the issue involved was squarely covered by the decision in W.P.No.11154/2023 (T-IT) and connected matters.
  • The respondents accordingly did not oppose disposal of the writ petition on the same terms as that earlier ruling.

Court Order / Findings

  • The Court noted the joint submission of both counsel that the controversy was squarely covered by the earlier decision dated 03.07.2024 in W.P.No.11154/2023 (T-IT) and connected matters.
  • The Court accordingly issued a Writ of Certiorari, quashing the show-cause notice dated 23.04.2021 (SCN No.520/2021-ST), the Order-in-Original dated 26.03.2022, the Order-in-Appeal dated 12.03.2025, and the garnishee order dated 13.02.2023.
  • The matter was relegated to the officers designated in terms of the observations made in paragraph 8 of the earlier order dated 03.07.2024 in the Karnataka Chinmaya Seva Trust case.
  • The petitioner was permitted to file a reply to the show-cause notice within 60 days from receipt of the certified copy of the order, and such reply shall be considered by the designated officers in accordance with law.

Important Clarification

  • The ruling demonstrates the High Court's practice of disposing of writ petitions raising an issue already settled by a coordinate or principal bench decision, extending the same relief to similarly placed assessees without re-litigating the underlying legal controversy.
  • Quashing of the show-cause notice, adjudication order, appellate order and the garnishee/recovery order together restores the matter to the stage of reply, effectively giving the assessee a fresh opportunity to contest the demand on merits.
  • The time-bound direction (60 days) to file a reply ensures that the relief does not result in indefinite non-adjudication of the underlying tax dispute.
  • Recovery action through garnishee proceedings cannot survive once the foundational show-cause notice and orders founding the demand are quashed.

Sections Involved

  • Finance Act, 1994 – service tax show-cause notice and adjudication proceedings under challenge.
  • Central Goods and Services Tax Act, 2017 – the underlying legal principle applied, as settled in the Karnataka Chinmaya Seva Trust ruling concerning show-cause and adjudication procedure.
  • Articles 226 and 227 of the Constitution of India – writ jurisdiction invoked for quashing administrative and recovery orders.

Decision – In Favour of

The writ petition was disposed of with directions in favour of the Assessee: the show-cause notice, Order-in-Original, Order-in-Appeal and garnished order were all quashed, and the petitioner was granted liberty to file a fresh reply to be considered by the designated officers within a stipulated timeframe.

Case Details

Court: High Court of Karnataka, Kalaburagi Bench
Case No.: Writ Petition No. 202522 of 2025 (T-RES)
Coram: Hon'ble Ms. Justice Jyoti Mulimani
Date of Order: 16th September, 2025

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