- 1 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 23289 OF 2025 (T-RES) BETWEEN: M/S. E-SPORTS COMPANY, A PARTNERSHIP FIRM, HAVING ITS PRINCIPAL PLACE OF BUSINESS, NOW AT: NO.179, 3RD FLOOR, ROOPA COMPLEX, 1ST MAIN ROAD, SHESHADRIPURAM, BENGALURU - 560 020. HAVING ITS PRINCIPAL PLACE OF BUSINESS AT: DIAMAND POINT , CTS NO.2948, FIRST FLOOR, KOPIKKAR ROAD, HUBLI, DHARWAD - 580 020. REPRESENTED BY ITS MANAGING PARTNER: SHRI. JAYARAM KRISHNAPPA SHETTY, AT: 4TH FLOOR, NO.403, MOTI APARTMENT, KUMARA PARK EAST, KUMARAKRUPA ROAD, BENGALURU – 560 001. …PETITIONER (BY SRI. PALLAVA R., ADVOCATE) AND: 1. THE UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, Digitally signed by NAGAVENI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 DEPARTMENT OF REVENUE, JEEVAN DEEP BUILDING, SANSAD MARG, NEW DELHI - 110 001. 2. THE STATE OF KARNATAKA, REPRESENTED BY ITS PRINCIPAL SECRETARY, DEPARTMENT OF FINANCE, VIDHANA SOUDHA, AMBEDKAR VEEDHI, BENGALURU – 560 001. 3. THE COMMISSIONER OF COMMERCIAL TAXES, COMMERCIAL TAXES DEPARTMENT (GST), COMMERCIAL TAXES OFFICE -1, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU - 560 001. 4. THE JOINT COMMISSIONER OF COMMERCIAL TAXES, LOCAL GOODS AND SERVICES, TAXES OFFICE (LGSTO) - 320, COMMERCIAL TAXES HOUSE, P.B.ROAD, NAVANAGAR, HUBBALLI - 580 001. 5. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LOCAL GOODS AND SERVICES, TAXES OFFICE (LGSTO) - 320, COMMERCIAL TAXES HOUSE, P.B.ROAD, NAVANAGAR, HUBBALLI – 580 001. …RESPONDENTS (BY SRI. JEEVAN J.NEERALGI, ADVOCAE FOR R1; SRI. K.HEMA KUMAR, AGA FOR R2 TO R5) - 3 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 THIS WP IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE SHOW CAUSE NOTICE BEARING REFERENCE NO.ZA290125075450N DATED 16/01/2025 ISSUED BY THE R5 HEREIN GIVEN HEREIN AT ANNX-J AND AS WELL AS THE ORDER BEARING REFERENCE NO. ZA290225247224M DATED 27/02/2025 PASSED BY THE R5 HEREIN GIVEN HEREIN AT ANNX-K AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before this Court seeking the following prayers: "a) issue a Writ of Certiorari or any other appropriate Writ, Order or direction and QUASH the Show Cause Notice bearing reference No: ZA290125075450N dated 16.01.2025 issued by the 5th Respondent herein given herein at ANNEXURE-'J' and as well as the Order bearing reference No: ZA290225247224M dated 27.02.2025 passed by the 5th Respondent herein given herein at ANNEXURE-'K'; and b) Direct the Respondent No. 04 and 05 herein to consider the representation dated 04.07.2025 of the Petitioner firm which is given herein at ANNEXURE-'L' - 4 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 and pass Orders in accordance with law after granting sufficient opportunity of hearing; c) Pass any other or further Orders as this Hon'ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity." 2. Heard Sri.Pallava R., learned counsel appearing for the petitioner, Sri.Jeevan J Neeralgi, learned counsel appearing for respondent No.1, Sri.K.Hema Kumar, learned AGA appearing for respondent Nos.2 to 5 and have perused the material on record. 3. The petitioner is said to be a Partnership Firm constituted in the year 2005 and was assessed to value added tax. On the new regime i.e. the GST coming into force, the petitioner has been diligently making payments, is the averment. The issue that has driven the petitioner to this Court is issuance of a show cause notice seeking to show cause as to why GST registration of the petitioner should not be revoked or cancelled on certain premise. The show cause notice reads as follows. "Reference No.: ZA290125075450N Date: 16/01/2025 E SPORTS COMPANY DIAMAND POINT, - 5 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 CTS NO 2948, FIRST FLOOR, HUBLI, KOPPIKAR ROAD, Dharwad, Karnataka, 580020 GSTIN: 29AAKFP0469J1ZR Date: 23/12/2024 Application Reference Number (ARN): AA291224070112M Show Cause Notice for rejection of application for revocation of cancellation of registration This has reference to your application dated 23/12/2024 regarding revocation of cancellation of registration. Your application has Been examined and the same is liable to be rejected for the following reasons: 1. Any Supporting Document - Others (Please specify) - 4.As per adjudication order passed U/s 73 of GST Law you are having huge liability in the "electronic liability ledger". The details of pending dues are sent your registered e-mail ID After clearance of all dues, your appln. will be considered. You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice. If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits. Kindly refer the supportive document attached for case specific details." 4. Learned counsel for the petitioner submits that he would have submitted a reply to the show cause notice but for the reason that it depicts a post-decisional hearing as the notice indicates that his application would be considered only after clearance of all the dues. The learned counsel has justification that he has no dues to be cleared at all. In the light - 6 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 of the observation in the show cause notice, nothing is left to be replied, is the submission of the learned counsel by the petitioner. 5. Learned AGA would however dispute the position in contending that it may be wrong choice of words in the order, but nonetheless it is only a show cause notice. The said submission of the learned AGA would have been acceptable, but for the clear and unequivocal intention of the authority i.e. the Assistant Commissioner in issuing the notice and the words "After clearance of all dues, your appln. will be considered". This undoubtedly amounts to a post-decisional hearing. As the decision is taken that his application would be considered only after clearance of dues, the petitioner submits that he has justification that he has no dues at all. In that light, the show cause notice insofar as it determines the answer and then seeks a question by way of show cause, is unsustainable in law. It is apposite to refer to the judgment in SHEKHAR GHOSH - 7 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 vs. UNION OF INDIA,1 wherein at paras 14 to 17, it is observed as follows: “…. …. …. 14. A post-decisional hearing was not called for as the disciplinary authority had already made up its mind before giving an opportunity of hearing. Such a post-decisional hearing in a case of this nature is not contemplated in law. The result of such hearing was a foregone conclusion. 15. In K.I. Shephard v. Union of India [(1987) 4 SCC 431 : 1987 SCC (L&S) 438 : AIR 1988 SC 686] this Court opined: (SCC p. 449, para 16) “It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose.” (See also V.C., Banaras Hindu University v. Shrikant [(2006) 11 SCC 42 : (2006) 6 Scale 66] .) 16. We are, however, not oblivious of the fact that there is some shift in the concept of principles of natural justice which has been noticed by this Court in P.D. Agrawal v. State Bank of India [(2006) 8 SCC 776 : (2007) 1 SCC (L&S) 43 : (2006) 5 Scale 54] in the following terms: (SCC p. 794, para 39) “… The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principle/doctrine of audi alteram partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principle. The Court applies the principles of natural justice having regard to the fact situation obtaining in each case. It is not applied in a 1 (2007) 1 SCC 331 - 8 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 vacuum without reference to the relevant facts and circumstances of the case. It is no unruly horse. It cannot be put in a straitjacket formula…” 17. It is not denied or disputed that even when a mistake is sought to be rectified, if by reason thereof, an employee has to suffer civil consequences ordinarily the principles of natural justice are required to be complied with. It was so held in Ram Ujarey v. Union of India [(1999) 1 SCC 685 : 1999 SCC (L&S) 374] in the following terms: (SCC pp. 691-92, para 17) “17. There is yet another infirmity in the impugned order of reversion. The appellant had been allowed the benefit of service rendered by him as Coal Khalasi in the Loco Department from 1964 to 1972 as that period was counted towards his seniority and it was on that basis that he was called for the trade tests which the appellant had passed and was, thereafter, promoted to the posts of Semi-skilled Fitter and Skilled Fitter. If the benefit of service rendered by him from 1964 to 1972 was intended to be withdrawn and promotion orders were to be cancelled as having been passed on account of mistake, the respondents ought to have first given an opportunity of hearing to the appellant. The appellant having earned two promotions after having passed the trade tests, could not have been legally reverted two steps below and brought back to the post of khalasi without being informed that the period of service rendered by him from 1964 to 1972 could not be counted towards his seniority and, therefore, the promotion orders would be cancelled. In a situation of this nature, it was not open to the respondents to have made up their mind unilaterally on facts which could have been shown by the appellant to be not correct but this chance never came as the appellant, at no stage, was informed of the action which the respondents intended to take against him.” (Emphasis supplied) - 9 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 6. Learned AGA submits that if petitioner would appear before the authority along with the reply, the personal hearing also could be rendered. 7. In the light of the aforesaid reasons, the show cause notice shall now be read without those words "After clearance of all dues, your appln. will be considered". Those words in the show cause notice would stand obliterated. The petitioner shall now submit his reply to the show cause notice dated 16.01.2025 and the Assistant Commissioner-the adjudicating authority shall consider the reply in accordance with law and pass necessary orders thereon. 8. In the light of the aforesaid reasons, the order dated 27.02.2025 would be rendered unsustainable. For the aforesaid reasons, the following: ORDER [i] Order dated 27.02.2025 stands quashed. - 10 - HC-KAR NC: 2025:KHC:31518 WP No. 23289 of 2025 [ii] The words in the notice dated 16.01.2025 "After clearance of all dues, your appln. will be considered" stands obliterated. [iii] The petitioner along with the reply, shall appear before the respondent-Assistant Commissioner on 10.09.2025 at 2.30 p.m. [iv] The respondent-authority shall regulate its procedure and take the proceedings to its logical conclusion. Ordered accordingly and Writ Petition is disposed. Sd/- (M.NAGAPRASANNA) JUDGE CBC List No.: 1 Sl No.: 45 CT:SS