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2026 Supreme(Online)(Kar) 24846
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
NC: 2026:KHC:22841
WP No. 12121 of 2026
DATED THIS THE 25TH DAY OF APRIL, 2026
BEFORE
THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
WRIT PETITION NO. 12121 OF 2026 (T-RES)
BETWEEN:
BANKAL SUBBEGOWDA BHARATHI,
AN INDIVIDUAL,
WIFE OF SHRI VENKATA CHALAIAH,
AGED 70 YEARS,
HAVING OFFICE AT 2ND FLOOR NO.6,
POORNAPRAJNA SCHOOL MAIN ROAD,
M.S. RAMAIAH ENCLAVE,
BENGALURU - 560 073.
…PETITIONER
(BY SRI. PRADYUMNA HEJIB.,ADVOCATE)
AND:
1. THE COMMISSIONER OF CENTRAL TAX,
GST NORTH-WEST COMMISSIONERATE,
2ND FLOOR, SOUTH WING,
BMTC BUS STAND COMPLEX,
SHIVAJINAGAR,
BENGALURU - 560 051.
2. THE ASSISTANT COMMISSIONER OF CENTRAL TAX,
GST NWD-3 DIVISION,
BENGALURU WEST COMMISSIONERATE,
2ND FLOOR, SOUTH WING
BMTC BUS STAND COMPLEX,
SHIVAJINAGAR,
BENGALURU - 560 051.
…RESPONDENTS
(BY SRI. AKASH SHETTY., ADVOCATE)
For the Appellants/Petitioners: Pradyumna Hejib
For the Respondents: Akash Shetty
An adjudicating authority is bound to consider and record reasoned findings on the specific contentions raised by the assessee regarding the nature of services and applicability of exemptions before confirming a tax demand, failing which the order is liable to be set aside for non-application of mind.
Headnote:(A) Finance Act, 1994 - Service Tax - Adjudication of Service Tax liability - Order-in-Original passed without addressing contentions regarding transportation services and relevant notifications - Petitioner submitted documents indicating transportation of goods - Held, authority failed to record findings on specific contentions, rendering the order unsustainable - Matter remitted for fresh consideration including claim of limitation for the period April 2015 to September 2015.
Facts of the case:
The petitioner challenged an Order-in-Original which confirmed a service tax demand. The petitioner contended that the services rendered were transportation services, for which the tax liability rested with the recipient as per Notification No. 30/2012-ST. Despite the production of invoices and documents, the adjudicating authority issued an order confirming the demand without addressing the nature of the services or the applicability of the exemption/notification.
Findings of Court:
The High Court observed that while the authority acknowledged the petitioner's contentions and the documents produced, it provided no reasoning for discarding these claims. Consequently, the Court set aside the impugned order and remitted the matter for fresh adjudication.
Issues: Whether the adjudicating authority acted in violation of the principles of natural justice by failing to consider evidence and arguments regarding the nature of services and tax liability exemption.
Ratio Decidendi: An adjudicating authority must record specific findings on all substantial contentions raised by the assessee; failure to discuss evidence and provide reasoning for rejecting the same constitutes non-application of mind, necessitating a remand for re-adjudication.
Result: Petition disposed of; matter remanded.
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY SUCH OTHER APPROPRIATE WRIT/S TO QUASH AND SET ASIDE ORDER BEARING NO.08/2025-26/COM/BNW (DIN 20250957YX0000756203) DATED 26.09.2025 PASSED BY THE FIRST RESPONDENT ANNEXURE-A.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
ORAL ORDER
Learned counsel, Sri. Akash Shetty accepts notice for the respondents.
2. The petitioner has assailed the validity of the Order-in-Original at Annexure-A. In terms of the said order, the authority has adjudicated under the provisions of the Finance Act, 1994 and raised the demand of service tax. It is to be noticed that on an earlier occasion, Order in-Original was challenged before this Court in W.P.No.9265/2024 and this Court disposed of the said writ petition along with other writ petitions by order dated 16.07.2024. In terms of directions passed, matter was relegated before the authority with liberty to the petitioners to file additional replies. There were certain observations made relying on order passed in W.P.No.11154/2023, in light of which, the exercise of adjudication was directed to be redone. The observations made in the aforesaid order at para-3 onwards till para-5 are extracted below for reference:
"3. The observations made in the order dated 03.07.2024 passed in W.P.No.11154/2023 and connected petitions, reads as follows:-
"These petitions have been filed calling in question the action of the respondent Department in issuing show-cause notice or having passed the orders-in-original relating to demand sought to be raised under the provisions of the Finance Act, 1994 relating to service tax liability.
2. In all these matters, the proceedings by way of show-cause notice under the Finance Act for service tax liability have been initiated on the basis of inputs received from the Central Board of Direct Taxes on the basis of Form 26AS/Income Tax returns filed.
3. The details of the writ petitions and the stages are as follows:
| Challenge to Show-cause Notice | Challenge to Orders-in Original |
|---|---|
| Column No.1 | Column No.2 |
| WP No.16891/2022 | WP No.12840/2023 |
| WP No.13445/2023 | WP No.15832/2022 |
| WP No.15959/2021 | WP No.3318/2023 |
| WP No.24822/2022 | WP No.14425/2022 |
| WP No.8514/2023 | WP No.15018/2022 |
| WP No.24650/2022 | |
| WP No.12906/2023 | |
| WP No.22063/2022 | |
| WP No.19792/2022 | |
| WP No.25156/2022 | |
| WP No.5896/2023 | |
| WP No.17407/2023 | |
| WP No.11154/2023 | |
| WP No.9765/2022 | |
| WP No.17591/2022 | |
| WP No.1754/2023 | |
| WP No.8858/2023 | |
| WP No.16501/2023 | |
| WP No.7071/2023 | |
| WP No.9906/2023 | |
| WP No.8409/2023 | |
| WP No.8184/2023 | |
| WP No.16170/2022 | |
| WP No.1198/2024 | |
| WP No.14092/2023 | |
| WP No.341/2023 | |
| WP No.274/2023 | |
| WP No.12003/2022 | |
| WP No.13813/2022 | |
| WP No.7829/2023 | |
| WP No.20282/2022 | |
| WP No.19000/2022 | |
| WP No.8336/2023 | |
| WP No.10238/2023 | |
| WP No.6756/2024 |
4. After having heard the matters on various occasions, the Union of India have taken a stand and filed affidavit of the Principal Commissioner, Central Taxes.
5. Sri.N.Venkataraman, learned Additional Solicitor General who was present before the court on 27.06.2024 had submitted that they desire that the matters be resolved and accordingly have putforth a proposed mechanism and made certain suggestions in the affidavit filed. The relevant extract of the affidavit filed by the Principal Commissioner of Central Tax, presently holding charge of Bengaluru West and additional charge of Bengaluru East Commissionerate reads as hereunder:
"I, Kiran Verma, working as Principal Commissioner of Central Tax, presently holding charge of Bengaluru West and additional charge of Bengaluru East Commissionerate, Bengaluru do hereby solemnly affirm and state on oath as follows:
I am working as Principal Commissioner of Central Tax, Bengaluru West and holding additional charge of Bengaluru East Commissionerate, Bengaluru -560
