- 1 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 687 OF 2025 (T-RES) C/W WRIT PETITION NO. 4228 OF 2023 (T-RES) WRIT PETITION NO. 4341 OF 2023 (T-RES) IN WP No. 687/2025 BETWEEN: CASTLES VISTA PVT. LTD., (PREVIOUSLY KNOWN AS MANTRI CASTLES PVT. LTD.) A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED ADDRESS AT NO. 41, MANTRI HOUSE VITTAL MALLYA ROAD BENGALURU – 560 001 REPRESENTED HEREIN BY ITS DGM ACCOUNTS AND FINANCE (TAXATION) MR. RAGHAVENDRA N. …PETITIONER (BY SRI SANDEEP HUILGOL, ADVOCATE) AND: 1. THE JOINT COMMISSIONER OF Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 COMMERCIAL TAXES (ADMN) DGSTO-1, BENGALURU 5TH FLOOR, TTMC BMTC BUILDING YESHWANTPURA BENGALURU – 560 022. 2. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.8, DGSTO 1, BENGALURU 3RD FLOOR, TTMC BMTC BUILDING YESHWANTPURA BENGALURU – 560 022. 3. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1, DGSTO 1, BENGALURU 3RD FLOOR, TTMC BMTC BUILDING YESHWANTPURA BENGALURU – 560 022. 4. THE STATE OF KARNATAKA REPRESENTED HEREIN BY THE PRINCIPAL SECRETARY - FINANCE DEPARTMENT GOVERNMENT OF KARNATAKA VIDHANA SOUDHA, BENGALURU – 560 001. …RESPONDENTS (BY SRI H.HEMA KUMAR, AGA) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO-(I) QUASH THE IMPUGNED ORDER DATED 06.11.2024 BEARING T-7586/24-25, CAS ORDER NO. 358440921 AND NO:JC(A)/DGSTO- 1/SMR- VAT/MANTRI/CR-03/2024-25 PASSED BY THE 1ST RESPONDENT UNDER SECTION 63-A OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 (ANNEXURE A); (II) QUASH THE - 3 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 IMPUGNED ORDER DATED 04.01.2025 BEARING NO. ACCT(AUDIT).1.8/T.NO.521/2024-25 AND CAS NO. 372359738.02 PASSED BY THE 2ND RESPONDENT UNDER THE PROVISIONS OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 (ANNEXURE A-1); (III) QUASH THE IMPUGNED NOTICE OF DEMAND DATED 04.01.2025 BEARING NO. 157786141 AND CAS ORDER NO. 372359738.02 ISSUED BY THE 2ND RESPONDENT IN FORM VAT 180 UNDER THE PROVISIONS OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 (ANNEXURE A- 2); (IV) DECLARE THAT AFTER AN ORDER OF WAIVER HAS BEEN PASSED UNDER THE KARASAMADHANA SCHEME, 2021, IN RESPECT OF A REASSESSMENT ORDER PASSED UNDER THE KVAT ACT, PROCEEDINGS FOR SUO MOTO REVISION CANNOT BE INITIATED UNDER THE KVAT ACT IN RESPECT OF THE SAID REASSESSMENT ORDER WHICH FORMED THE SUBJECT MATTER OF THE ORDER OF WAIVER NOR CAN SUCH SUO MOTO REVISION PROCEEDINGS BE INITIATED IN RESPECT OF THE SAME ASSESSMENT YEAR IN RELATION TO WHICH THE SAID REASSESSMENTORDER WAS PASSED. IN WP NO. 4228/2023 BETWEEN: 1. SIMPLEX INFRASTRUCTURES LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 REPRESENTED HEREIN BY ITS JOINT GENERAL MANAGER, MR.SANDIP GHOSH C/O BHAIRAV HOLDINGS INC. 22 AND CREST PROJECT, SITE NOS. 71 AND 71/1, YESHWANTHPURA INDUSTRIAL SUBURB BENGALURU – 560 022 FORMERLY AT BRIGADE PLAZA, UNIT C, 1ST FLOOR NO.71/1, S.C.ROAD, ANAND RAO CIRCLE, - 4 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 BENGALURU – 560 009. ...PETITIONER (BY SRI SANDEEP HUILGOL, ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENTED HEREIN BY THE PRINCIPAL SECRETARY-FINANCE DEPARTMENT GOVERNMENT OF KARNATAKA VIDHANA SOUDHA, BENGALURU – 560 001. 2. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE-I, BENGALURU VANIJYA THERIGE KARYALAYA KALIDASA ROAD, GANDHINAGAR, BENGALURU – 560 009. 3. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1, DGSTO-1, BENGALURU 3RD FLOOR, TTMC, BMTC BUS STAND BUILDINGS, YESHWANTPUR, BENGALURU – 560 022. ...RESPONDENTS (BY SRI HEMA KUMAR, AGA) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED ORDER DATED 07/12/2022 BEARING T-597/22- 23, CAS ORDER NO.336438736 AD SMR AND NO. ZAC- 1/BNG/SMR-56/2021-22 PASSED BY THE R-2 UNDER SECTION 64(1) OF THE KVAT ACT, 2003 (ANNEXURE-A); DECLARING THAT AFTER AN ORDER OF WAIVER HAS BEEN - 5 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 PASSED UNDER THE KARASAMADHANA SCHEME, 2019, IN RESPECT OF A REASSESSMENT ORDER PASSED UNDER THE KVAT ACT, PROCEEDINGS FOR SUO MOTO REVISION CANNOT BE INITIATED UNDER THE KVAT ACT IN RESPECT OF THE SAID REASSESSMENT ORDER WHICH FORMED THE SUBJECT MATTER OF THE ORDER OF WAIVER NOR CAN SUCH SUO MOTO REVISION PROCEEDINGS BE INITIATED IN RESPECT OF THE SAME ASSESSMENT YEAR IN RELATION TO WHICH THE SAID REASSESSMENT ORDER WAS PASSED. IN WP NO. 4341/2023 BETWEEN: 1. SIMPLEX INFRASTRUCTURES LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 REPRESENTED HEREIN BY ITS JOINT GENERAL MANAGER, MR.SANDIP GHOSH C/O. BHAIRAV HOLDINGS INC., 22 AND CREST PROJECT, SITE NOS. 71 AND 71/1 YESHWANTHPURA INDUSTRIAL SUBURB BENGALURU – 560 022 FORMERLY AT: BRIGADE PALZA, UNIT C, 1ST FLOOR, NO.71/1, S.C.ROAD, ANAND RAO CIRCLE, BENGALURU – 560 009. ...PETITIONER (BY SRI SANDEEP HUILGOL, ADVOCATE) - 6 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 AND: 1. STATE OF KARNATAKA REPRESENTED HEREIN BY THE PRINCIPAL SECRETARY FINANCE DEPARTMENT GOVERNMENT OF KARNATAKA VIDHANA SOUDHA, BENGALURU – 560 001. 2. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE)-I, BENGALURU VANIJYA THERIGE KARYALAYA KALIDASA ROAD, GANDHINAGAR, BENGALURU – 560 009. 3. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1 DGSTO-1, BENGALURU 3RD FLOOR, TTMC, BMTC BUS STAND BUILDINGS, YESHWANTPUR, BENGALURU-560022. ...RESPONDENTS (BY SRI HEMA KUMAR, AGA) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE IMPUGNED ORDER DATED 09.12.2022 BEARING T-606/22- 23, CAS ORDER NO.378438754AD SMR AND NO.ZAC- 1/BNG/SMR-57/2021-22 PASSED BY THE 2ND RESPONDENT UNDER SECTION 64(1) OF THE KVAT ACT, 2003 (ANNEXURE A); DECLARING THAT AFTER AN ORDER OF WAIVER HAS BEEN PASSED UNDER THE KARASAMADHANA SCHEME, 2019, IN RESPECT OF A REASSESSMENT ORDER PASSED UNDER THE KVAT ACT, - 7 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 PROCEEDINGS FOR SUO MOTO REVISION CANNOT BE INITIATED UNDER THE KVAT ACT IN RESPECT OF THE SAID REASSESSMENT ORDER WHICH FORMED THE SUBJECT MATTER OF THE ORDER OF WAIVER NOR CAN SUCH SUO MOTO REVISION PROCEEDINGS BE INITIATED IN RESPECT OF THE SAME ASSESSMENT YEAR IN RELATION TO WHICH THE SAID REASSESSMENT ORDER WAS PASSED. THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER Petitioners are before this Court calling in question the suo motu revisional proceedings initiated by the respondents- Authorities against the petitioners under the Karnataka Value Added Tax Act, 2003, after an order of waiver has been passed under the Karasamadhana scheme. The issue in all these cases is common. 2. Heard Sri Sandeep Huilgol, learned counsel appearing for petitioners and Sri K Hema Kumar, learned Additional - 8 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 Government Advocate appearing for respondents, in all these cases. 3. Learned counsel for petitioners submits that the issue in the lis stands answered by the judgment rendered by the Division Bench in SALES TAX APPEAL (STA) No.8 of 2025 disposed on 18-06-2025. The Division Bench has held as follows: “…. …. …. 9. Answer to the above point would be in the negative for the following reasons: The facts are not in dispute. Reassessment proceedings were initiated against the assessee-appellant, by issuing notice under Section 39 of KVAT Act by the Prescribed Authority which culminated in order dated 15.03.2021, against which, the assessee-appellant filed an appeal which was partly allowed and for the remaining grounds which were not allowed by the First Appellate Authority, demand was raised along with interest and penalty. In the meanwhile, Karasamadhana Scheme, 2021 was introduced under notification dated 29.03.2021. The assessee-appellant filed application to avail the benefit under Karasamadhana Scheme, 2021 well within the time prescribed under the scheme. It is also to be noted that the time to avail benefits of scheme was extended further in view of lockdown due to COVID-19. 10. A dealer shall not be eligible to avail the benefits of Karasamadhana Scheme, 2021 in terms of clause 5.7 of the scheme. Clause 5.7 of Karasamadhana Scheme, 2021 reads as follows: - 9 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 “5.7. The dealer shall not be eligible to avail the benefits of this Scheme in relation to an order giving rise to arrears of tax, penalty and interest where:- (a) State has filed an appeal before the Karnataka Appellate Tribunal or the Central Sales Tax Appellate Authority; or (b) State has filed an appeal or revision or any kind of application before the High Court or the Supreme Court; or (c) any competent authority has initiated suomotu revision proceedings as on the date of this Government Order; or (d) any rectification is made after 31.07.2021. In terms of the above clause, a dealer, against whom any competent authority has initiated suo-motu revision proceedings as on the date of coming into force of Karasamadhana Scheme, 2021, such a dealer would not be eligible to avail benefits of the said Scheme. 11. In the case on hand, the assessee-appellant submitted application under Karasamadhana Scheme, 2021 to avail waiver of 100% arrears of interest and penalty well within the time i.e., 31.10.2021. The application submitted by assessee-appellant was accepted by order dated 28.12.2021 confirming the waiver of interest and penalty. However, notice under Section 64(1) of KVAT Act was issued subsequently on 16.02.2024. The above Clause 5.7 makes it clear that a dealer shall not be eligible to avail benefits of the Karasamadhana Scheme, 2021 if suo-motu revision proceedings has already been initiated by the time, the scheme was introduced. In the instant case, no suo-motu revision was pending against the assessee-appellant as on the date of notifying the Karasamadhana Scheme, 2021, but suo-motu revision was initiated much subsequent to accepting and passing order in favour of the assessee- appellant under Karasamadhana Scheme, 2021. 12. If the revisional authority is permitted to initiate proceedings under Section 64(1) of KVAT Act subsequent to granting benefit under Karasamadhana Scheme, 2021, - 10 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 the very purpose and object of introducing Karasamadhana Scheme, 2021 would be defeated. When the proceedings against the appellant-assessee for the period from April 2016 to March 2017 has culminated and attained finality under Karasamadhana Scheme, 2021 by passing order dated 28.12.2021, it is unreasonable and arbitrary to invoke revisional power under Section 64 of KVAT Act. When once the assessee-appellant is granted benefit under Karasamadhana Scheme, 2021, the benefit granted cannot be taken away by initiating proceedings under Section 64 of KVAT Act, then introducing Karasamadhana Scheme, 2021 would be otiose and it would defeat the purpose for which Karasamadhana Scheme, 2021 is introduced. To get waiver of arrears of interest and penalty, the assessee-appellant shall have to make payment of full arrears of taxes. When the assessee pays the entire tax arrears, seeking waiver of interest and penalty which is accepted, cannot be deprived by initiating proceedings under Section 64 of KVAT Act. 13. For the reasons recorded above, the substantial question of law No.1 is answered in favour of the assessee-appellant and against the respondent-revenue. In view of answering substantial question of law No.1 in favour of the assessee-appellant, the other substantial questions of law would no more survive for consideration. …” 4. The issue in the lis, as observed hereinabove, is identical. The petitioners avail the benefit of Karasamadhana scheme and pay the entire tax. Notwithstanding the payment of tax, it transpires that suo motu revisional proceedings were initiated against the petitioners by the 2nd respondent. This, - 11 - HC-KAR NC: 2025:KHC:34938 WP No. 687 of 2025 C/W WP No. 4228 of 2023 WP No. 4341 of 2023 the Division Bench has, in the afore-quoted judgment, held that such action is impermissible in law. 5. In the light of the issue being admittedly similar and covered by the judgment rendered by the Division Bench supra on all its fours, I deem it appropriate to dispose these petitions granting the prayers that is sought for by the petitioners. 6. For the aforesaid reasons, the following: ORDER (i) Writ Petitions are allowed. (ii) Impugned order dated 06-11-2024 passed by the 1st respondent and subsequent two orders dated 04-01-2025 passed by the 2nd respondent in W.P.No.687 of 2025; order dated 07-12-2022 in W.P.No.4228 of 2023 and the order dated 09-12-2022 in W.P.No.4341 of 2023, both passed by the 2nd respondent stand quashed. SD/- (M.NAGAPRASANNA) JUDGE BKP List No.: 1 Sl No.: 56