- 1 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 3819 OF 2023 (T-RES) BETWEEN: M/S PACE POWER SYSTEMS (P) LTD (PRIVATE LTD COMPANY) REGISTERED UNDER THE COMPANIES ACT, 1956, REPRESENTED BY ITS AUTHORISED SIGNATORY, SRI RAMESH G., AGED ABOUT 60 YEARS, PLOT NO V-12, GROUND FLOOR, 1ST PHASE, KUMBALAGODU, INDUSTRIAL AREA, MYSORE ROAD, BENGALURU – 560 074 …PETITIONER (BY SRI. SURENDRAN THUMBOOCHETTY, FOR SRI. SRIDHAR MURTHY A., ADVOCATES) AND: 1. THE STATE OF KARNATAKA REPRESENTED BY ITS DEPUTY SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU – 560 001 2. THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA, VANIJYA THERIGE KARYALAYA, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU – 560 009 Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 3. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LGSTO -062, DGSTO -02, NO 642, PIONEER PLAZA, KENCHENAHALLI MAIN ROAD, R.R. NAGAR, BENGALURU – 560 098 …RESPONDENTS (BY SMT. JYOTI M. MARADI, HCGP) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASHING THE ORDER BEARING NO.ADCOM(R AND R)/RFD/CR-05/2022-23 DATED 20/08/2022 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 51(1) OF THE ACT PERTAINING TO THE ASSESSMENT PERIODS 2008-09 IN THE CASE OF THE PETITIONER (ANNEXURE-K) AND ETC., THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “i) This Hon’ble High Court may be pleased to issue a writ of Certiorari or a direction in the nature of a writ of Certiorari quashing the order bearing No.ADCOM(R&R)/RFD/CR-05/2022-23 dated 20.08.2022 issued by the Second Respondent under Section 51(1) of the Act pertaining to the assessment periods 2008-09 in the case of the Petitioner (Annexure-“K”) ii) This Hon’ble High Court may be pleased to issue a writ of Certiorari or a direction in the nature of a writ of Certiorari quashing the Communication bearing - 3 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 No.ACCT/LGSTO-62/T.No.426/2022-23 dated 20.12.2022 issued by the Third Respondent pertaining to the assessment periods 2008-09 in the case of the Petitioner (ANNEXURE – “H”). iii) This Hon’ble High Court may be pleased to issue a writ of Mandamus directing the Third Respondent to grant the refund of Rs.25,53,462-00 along with applicable interest to the Petitioner. iv) This Hon’ble High Court may be pleased to issue such other writ or writs or directions in the nature of a writ as this Hon’ble High Court may deem it fir to grant in the facts and circumstances of the petitioner’s case.” 2. Heard learned counsel for the petitioner and learned HCGP for the respondent Nos.1 to 3 and perused the material on record. 3. A perusal of the material on record will indicate that aggrieved by the order dated 31.05.2018, passed by the First Appellate Authority, the petitioner filed an appeal in STA No.319/2018 before the Karnataka Appellate Tribunal, Bengaluru. Vide final order dated 18.01.2022, the said appeal filed by the petitioner was allowed by the Karnataka Appellate Tribunal, Bengaluru, which remitted the matter back to the First Appellate - 4 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 Authority for reconsideration afresh in accordance with law as hereunder: ORDER The Appeal in STA No.319/2018 is allowed. The matter is remanded back to FAA to consider the production of relevant documents for the claim of input tax in respect of M/s. Royal Enterprises in the line of observation made in the FAA order dated 31.05.2018. The Registrar of the Tribunal is directed to comply with regulation 53(b) of Chapter – IX of Karnataka Appellate Tribunal Regulations 1979, by communicating this order to the persons mentioned therein. The Office is directed to send back the records of the lower authorities immediately.” 4. In pursuance of the same, the First Appellate Authority proceeded to pass an order dated 30.04.2022, allowing the appeal filed by the petitioner as hereunder: ORDER “44. The appeal filed by the appellant is Allowed' 45. The respondent is directed: - 5 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 i) To delete the impugned tax, interest and penalty levied on ITC disallowed amount related to the selling dealer M/s Royal Enterprises, TIN No.29280800399 in terms of this order. ii) To re-compute the net tax liability along with the consequential interest and penalty if applicable, by allowing deduction towards input tax the selling dealer M/s Royal Enterprises, TIN No.29280800399 from the output tax liability determined in terms of this order. related to iii) To issue revised demand notice by considering the payments made along with the monthly returns and also the payments made after re-assessment if any, in terms of this order.” 5. In pursuance of the same, the prescribed authority issued a proceedings determining the amount of Rs.25,53,462/- as being refundable to the petitioner. Accordingly, the petitioner filed an application dated 30.05.2022, which was rejected by the Joint Commissioner vide impugned order dated 20.08.2022 at Annexure- K followed by the impugned communication at Annexure-H dated 20.12.2022, aggrieved by which, the petitioner is before this Court by way of the present petition. 6. A perusal of the impugned order, communication and endorsement will indicate that the sole reason on which the refund - 6 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 request of the petitioner was rejected is by holding that the order dated 18.01.2022 required to be challenged by the respondent- revenue before this Court by way of Sales Tax Revision Petition and no other reasons are assigned by the respondents for rejecting the refund request of the petitioner. 7. It is context, it is a matter of record and undisputed fact that aggrieved by the aforesaid order dated 18.01.2022 passed by the Karnataka Appellate Tribunal, Bengaluru, respondent – revenue preferred Sales Tax Revision Petition No.10/2023 before this Court which came to be disposed of vide order dated 02.09.2025 has hereunder: “The State is before this Court in this petition under Section 65(1) of the Karnataka Value Added Tax Act, 2003 (for short, ‘2003 Act’) raising the following substantial questions of law and prayed to set aside the order dated 18.01.2022 in STA.No.319/2018 passed by the Karnataka Appellate Tribunal at Bengluru (for short, ‘the Tribunal’). “1. “1. Whether the impugned order of the Tribunal is correct, particularly, the order is passed without taking into account the factual aspects unearth during the course of the investigation and ignoring the relevant material and relying on the irrelevant aspects thereby leading to perversity of finding of facts? - 7 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 2. Whether the Tribunal was right under the facts and circumstances of the case by holding that the respondent-dealer has discharged the burden under Section 70 of the KVAT Act?” 2. The order of the Tribunal is a remand order. The operative portion of the said order reads as follows: “The appeal in STA No.319/2018 is allowed. The matter is remanded back to FAA to consider the production of relevant documents for the claim of input tax in respect of M/s. Royal Enterprises in the line of observation made in the FAA order dated 31.05.2018. The Registrar of the Tribunal is directed to comply with regulation 53(b) of Chapter-IX of Karnataka Appellate Tribunal Regulations 1979, by communicating this order to the persons mentioned therein. The office is directed to send back the records of the lower authorities immediately.” 3. Heard learned Additional Government Advocate Sri.Aditya Vikram Bhat for appellants/State and learned counsel Sri.Surendran Thumboochetty for respondent/assessee. Perused the petition papers. 4. Learned counsel for the respondent files memo dated 25.02.2025 enclosing the order passed by the Joint Commissioner of Commercial Taxes (Appeals) – 2 under Section 62 (6) of 2003 Act as well as order dated 26.05.2022 giving effect to the order dated 30.04.2022. - 8 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 5. In view of the fact that in pursuance to remand order under challenge, the Joint Commissioner of Commercial Taxes (Appeals) -2, Bengaluru has passed order under Section 62(6) of 2003 Act, which is given effect to under order dated 26.05.2022, the questions raised in the present revision petition would no more survive for consideration. It is open for the State to avail the remedy available under law. All contentions of the parties are left open. 6. With the above observations, the petition stands disposed of.” 8. In view of the disposal of the STRP No.10/2023 by Division Bench of this Court as stated supra, the sole reason assigned by the respondent refusing to refund the aforesaid amount back to the petitioner does not survive any longer especially when the said order dated 02.09.2025 passed by Division Bench in STRP No.10/2023 has attained finality and become conclusive and binding upon the respondents. 9. Under these circumstances, I am of the considered view that the impugned order dated 20.08.2022 at Annexure-K and impugned communication dated 20.12.2022 at Annexure-H deserves to be quashed and directions be issued to the - 9 - HC-KAR NC: 2025:KHC:43601 WP No. 3819 of 2023 respondents to refund an amount of Rs.25,53,462/- along with applicable interest within a stipulated time frame. 10. In the result, I pass the following: ORDER i) The petition is hereby allowed. ii) The impugned order dated 20.08.2022 at Annexure-K passed by respondent No.2 and impugned communication dated 20.12.2022 at Annexure-H passed by respondent No.3 are hereby quashed. iii) The respondent is directed to refund an amount of Rs.25,53,462/- along with applicable interest from the date of determination of refund by the respondents themselves on 26.05.2020 till the date of payment within a period of eight weeks from the date of receipt of copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 1 Sl No.: 27