- 1 - NC: 2025:KHC:15710 WP No. 16609 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 16609 OF 2024 (T-RES) BETWEEN: SHRI. MAHALINGA PATALI AGED ABOUT 64 YEARS RESIDING AT SHREE KATEEL HOUSE ADKARU MAVINAKATTE, JALSUR, SULLIA DAKSHINA KANNADA - 574 239 …PETITIONER (BY SMT. PREETHA MAHADEVAN ADVOCATE FOR SRI. GIRIDHAR S.V., ADVOCATE) AND: 1. THE COMMISSIONER OF CENTRAL EXCISE AND CENTRAL TAX MANGALURU OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, VII FLOOR, TRADE CENTER BUNTS HOSTEL ROAD, MANGALORE - 575 003 2. THE SUPERINTENDENT OF CENTRAL TAX SULLIA RANGE, EAST DIVISION, MANGALORE OFFICE OF THE SUPERINTENDENT OF CENTRAL EXCISE AND SERVICE TAX, SULLIA RANGE KEERTHANA PARADISE, PARLADKA ROAD KALLIMAR, PUTTUR, DAKSHINA KANNADA - 574 201 3. ADDITIONAL COMMISSIONER (APPEALS) OFFICE OF THE COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE (APPEALS) NO.71, CLUB ROAD, BELAGAVI - 590 001 4. THE COMMERCIAL TAX OFFICER (AUDIT)-3 PUTTUR, OFFICE OF THE COMMERCIAL TAX OFFICER (ENF)-3, DARBE, PUTTUR Digitally signed by SWAPNA V Location: High Court of Karnataka - 2 - NC: 2025:KHC:15710 WP No. 16609 of 2024 5. GOODS AND SERVICE TAX NETWORK THROUGH ITS SPECIAL SECRETARY 5TH FLOOR TOWER II JEEVAN BHARTI BUILDING JANPATH ROAD CONNAUGHT PLACE NEW DELHI - 110 001 6. UNION OF INDIA THROUGH ITS SECRETARY DEPARTMENT OF REVENUE MINISTRY OF FINANCE, NORTH BLOCK NEW DELHI - 110 001 7. GOODS AND SERVICES TAX COUNCIL REPRESENTED BY THE CHAIRPERSON 5TH FLOOR, TOWER II JEEVAN BHARTI BUILDING JANPATH ROAD, CONNAUGHT PLACE NEW DELHI - 110 001 8. CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS REPRESENTED BY THE CHAIRMAN DEPARTMENT OF REVENUE MINISTRY OF FINANCE NORTH BLOCK, NEW DELHI - 110 001 …RESPONDENTS (BY SRI. ARAVIND V CHAVAN, ADVOCATE FOR R1 TO R3, R5, R7 & R8. SRI. K. HEMA KUMAR, AGA FOR R4 SRI. MADANAN R. PILLAI, ADVOCATE FOR R6) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER IMPUGNED BEING THE ORDER-IN-APPEAL NO.MNG-JJ-ADC-14-2023-24- GST DATED 22.06.2023 AT ANNEXURE A TO THE WRIT PETITION, PASSED BY THE RESPONDENT NO.3 AND ETC., THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR - 3 - NC: 2025:KHC:15710 WP No. 16609 of 2024 ORAL ORDER In this petition, petitioner seeks the following reliefs: "Wherefore, it is respectfully prayed that this Hon'ble Court may be pleased to: (a) Issue a writ of Certiorari, Similar Writ, Order of Direction in the nature of a Writ or such appropriate Writ, and quash the Order Impugned being the Order-in-Appeal No.: MNG-JJ-ADC-14-2023-24-GST dated 22.06.2023 at ANNEXURE A to the Writ Petition, passed by the Respondent No. 3; (b) Issue a writ of Certiorari, Similar Writ, Order of Direction in the nature of a Writ or such appropriate Writ and quash the Order of Adjudication dated 23.11.2023 at ANNEXURE B to the Writ Petition, issued by the Respondent No. 4. (c) Declare that the denial of input credit to the Petitioner solely on the basis of the mere procedural and technical restriction on taking input tax credit that is set out in section 16(4) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 is unconstitutional unlawful, and arbitrary more so where the overriding and substantive provisions in sections 16(1) and (2) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 have admittedly been fulfilled by the Petitioner (ANNEXURE-H). (d) Declare that the retrospective amendment to Rule 61(5) of the Central Goods and Services Tax Rules 2017 (ANNEXURE-J), by way of Notification No.49/2019- - 4 - NC: 2025:KHC:15710 WP No. 16609 of 2024 CT is unconstitutional and ultra vires the Central Goods and Services Tax Act 2017, and declaring that, on the contrary the said amendment shall apply only for tax periods commencing after the date of the amending notification i.e., 09.10.2019 and not for tax periods commencing before the said date; (e) Declare that the retrospective amendment to Rule 61(5) of the Karnataka Goods and Services Tax Rules 2017 (ANNEXURE-L), by way of Notification (4- F/2019) No. FD47CSL2017 is unconstitutional and ultra vires the Karnataka Goods and Services Tax Act 2017, and declaring that, on the contrary the said amendment shall apply only for tax periods commencing after the date of the amending notification Le.. 30.10.2019 and not for tax periods commencing before the said date; (f) Declare that Notification No. 49/2019-CT dated 09.10.2019 (ANNEXURE-K) to the extent that it retrospectively amends Rule 61(5) of the Central Goods and Services Rules, 2017 is illegal and ultra vires the Central Goods and Services Act, 2017; (g) Declare that Notification (4-F/2019) No. FD47CSL2017 dated 30.10.2019 (ANNEXURE-M) to the extent that it retrospectively amends Rule 61(5) of the Karnataka Goods and Services Rules, 2017 is illegal and ultra vires the Karnataka Goods and Services Act, 2017; [ Without prejudice to the above and in any event, (h) Condone the delay in filing the monthly return in Form GSTR-3B for the tax period March 2018 with reference to the last date that is said to be set out in terms - 5 - NC: 2025:KHC:15710 WP No. 16609 of 2024 of Section 16(4) of the Central Goods and Services Tax Act, 2017 and Karnataka Goods and Services Tax Act, 2017 and thereby permitting the Petitioner to avail and utilize the Input Tax Credit of the tax admittedly paid to the vendors; (i) Pass an Order as the costs of the present Writ Petition; and (j) Pass such other Order or Orders as this Hon'ble Court may deem fit and proper in the circumstances of the case, in the interests of justice." 2. Heard learned counsel for the petitioner, learned counsel for respondent Nos.1 to 3, 5, 7 and 8, learned AGA for respondent No.4 and learned counsel for respondent No.6 and perused the material on record. 3. A perusal of the material on record would indicate that respondent Nos.1 to 3 and respondent Nos.5 to 8 instituted proceedings against the petitioner under Section 73(1) of CGST Act by issuance of show cause notice dated 05.09.2020 by respondent No.2, which culminated in the order-in-Original vide Annexure-D dated 05.07.2021 and confirmed by the First Appellate Authority in the order-in-Appeal vide Annexure-A dated 22.06.2023. 4. It is submitted that the issue in relation to the aforesaid impugned order-in-Original and the order-in-Appeal are directly and - 6 - NC: 2025:KHC:15710 WP No. 16609 of 2024 squarely covered by the judgment of this Court in the case of M/s Sadhana Enviro Engineering Services Vs The Joint Commissioner of Central Tax and Others passed in Writ Petition No.6138 of 2020 dated 03.09.2024, and the present petition may be disposed off accordingly. 5. It is also submitted that subsequent to the aforesaid order passed by the Original Authority and the Appellate Authority, respondent No.4 - Karnataka State GST Authorities issued impugned show cause notice at Annexure-F dated 29.09.2023 in relation to the very same financial year 2017-18 and in respect of the very same subject matter, which is clearly barred under Section 6(2)(b) of the CGST/KGST Act and consequently, the impugned show cause notice as well as the impugned adjudication order vide Annexure-B dated 23.11.2023 in respect of the same issue and the same period deserves to be quashed as being contrary to Section 6(2)(b) of CGST Act. 6. Per contra, learned AGA as well as learned counsel for the remaining respondents do not dispute that the issue in relation to the proceedings initiated by the Central GST Authorities is directly and squarely covered by the judgment of this Court in M/s Sadhana Enviro Engineering Services (supra), and the present - 7 - NC: 2025:KHC:15710 WP No. 16609 of 2024 petition may be disposed off accordingly. So also, learned AGA for respondent No.4 also does not dispute that it is only after passing of the impugned order by the Central GST Authorities that the State GST Authorities issued the impugned show cause notice at Annexure-F and passed the impugned order at Annexure-B, which is barred under Section 6(2)(b) of the CGST Act. 7. In view of the aforesaid facts and circumstances, I deem it just and appropriate to set aside Annexures-A and B and dispose off the petition in terms of M/s Sadhana Enviro Engineering Services (supra). 8. In the result, I pass the following:- ORDER (i) The petition insofar it relates to challenge to Annexures-A and B are concerned is allowed and disposed off in terms of M/s Sadhana Enviro Engineering Services (supra). (ii) The impugned order-in-Original and the impugned order-in-Appeal are set aside and the parties are relegated to the stage of show cause notice at Annexure-C dated 05.09.2020 issued by the - 8 - NC: 2025:KHC:15710 WP No. 16609 of 2024 respondent(s) and the respondents are directed to give effect to and implement the amended provisions contained in Section 118 of “The Finance (No.2) Act, 2024” relating to insertion of Section 16(5) to the CGST Act / KGST Act by providing sufficient and reasonable opportunity and hear the petitioner and proceed further in accordance with law within a period of one month from the date of receipt of a copy of this order. (iii) The impugned show cause notices vide Annexures-B and F dated 05.09.2020 and 29.09.2023 respectively are hereby quashed. (iv) The respondents are directed to unblock and release the credit balance of the petitioner in their ITC Ledger / Account, if not already released, immediately / forthwith upon receipt of a copy of this order without any delay. (v) All rival contentions on all other prayers sought for by the petitioner including the challenge to the statutory - 9 - NC: 2025:KHC:15710 WP No. 16609 of 2024 provisions are kept open and no opinion is expressed on the same. Sd/- (S.R.KRISHNA KUMAR) JUDGE *bgn/- CT:VS List No.: 1 Sl No.: 35