M/S PBI CONSTRUCTION COMPANY vs. ASSISTANT COMMISSIONER OF INCOME TAX

WP/105203/2023HC KarnatakaKAHC02013508202310 February 2025Bench: M.NAGAPRASANNA4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court of Karnataka, Dharwad Bench, did not delve into the merits of the case. The learned counsel for the petitioner filed a memo seeking to withdraw the writ petition. Consequently, the Court disposed of the petition as withdrawn. No findings were made on the legality or validity of the notifications or the assessment order. The issues raised by the petitioner regarding the imposition of GST on royalty paid for mining under the reverse charge mechanism were not decided. The operative direction was solely to dispose of the petition as withdrawn based on the petitioner's request.

What were the facts?

The petitioner, M/s. PBI Construction Company, a partnership firm, filed a writ petition before the High Court of Karnataka, Dharwad Bench. The petition challenged several notifications and an assessment order related to the imposition of Goods and Services Tax (GST) on royalty paid for mining under the reverse charge mechanism. Specifically, the petitioner sought to quash notifications dated June 28, 2017, June 29, 2017, October 6, 2021, and October 11, 2021, issued by the Union of India and the State of Karnataka, respectively. Additionally, they sought to quash an assessment order in Form ADT-02 dated December 28, 2022, issued by the Assistant Commissioner of Income Tax. The petitioner contended that these actions were unlawful, illegal, void-ab-initio, and ultra vires the Constitution of India and the respective GST Acts.

What were the issues?

1. Whether the notifications imposing GST on royalty paid for mining under the reverse charge mechanism are unlawful, illegal, void-ab-initio, and ultra vires the Constitution of India and the Central Goods and Services Tax Act, 2017? (Question of law) 2. Whether the notifications imposing GST on royalty paid for mining under the reverse charge mechanism are unlawful, illegal, void-ab-initio, and ultra vires the Constitution of India and the Karnataka Goods and Services Tax Act, 2017? (Question of law) 3. Whether the assessment order in Form ADT-02 dated December 28, 2022, is unlawful, illegal, void-ab-initio, and ultra vires the Constitution of India and the provisions of the Central Goods and Services Tax Act, 2017, and Karnataka Goods and Services Tax Act, 2017? (Question of law) Assessee's Contentions: The petitioner argued that the imposition of tax on royalty paid for mining under the reverse charge mechanism through the challenged notifications and assessment order was unlawful, illegal, void-ab-initio, and ultra vires the Constitution and the relevant GST Acts. No specific authorities, circulars, or precedents were mentioned in the provided text. Revenue's Contentions: The judgment does not record any specific contentions made by the respondents (Assistant Commissioner of Income Tax, Union of India, State of Karnataka, and Commissioner of Commercial Taxes).

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC-D:2587 WP No. 105203 of 2023

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

DATED THIS THE 10TH DAY OF FEBRUARY, 2025

BEFORE

THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

WRIT PETITION NO. 105203 OF 2023 (T-RES)

BETWEEN:

M/S. PBI CONSTRUCTION COMPANY (A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT, 1932) SHAHEEN MAHAL, BUNDAR ROAD, BHATKAL, UTTARA KANNADA- 581320. REPRESENTED BY ITS PARTNER AND AUTHORISED SIGNATORY. MR. P. B. IBRAHIM. …PETITIONER (BY SRI. K. L. PATIL, AND SRI S. S. BENTURMATH, ADVOCATES)

AND:

ASSISTANT COMMISSIONER OF INCOME TAX, SHAKTI CHAMBERS, ASHWINI CIRCLES, YELLAPUR ROAD, SIRSI, UTTARA KANNADA- 581402.

UNION OF INDIA, REPRESENTED BY ITS FINANCE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL SECRETARIAT, NORTH BLOCK, NEW DELHI- 110001.

STATE OF KARNATAKA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY,

Digitally signed by VISHAL NINGAPPA PATTIHAL Location: High Court of Karnataka, Dharwad Bench

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NC: 2025:KHC-D:2587 WP No. 105203 of 2023

NO. 255, VIDHAN SOUDHA, KARNATAKA- 560001.

COMMISSIONER OF COMMERCIAL TAXES, VANIJYA TERIGE KARYALAYA, GANDHINAGAR, BENGALURU, KARNATAKA- 560009. …RESPONDENTS (BY SRI Y.V. RAVIRAJ, ADVOCATE FOR R1, SRI S.S. KATAGERI, ADVOCATE FOR R2, SRI SHARAD V. MAGADUM, AGA FOR R3 & R4)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA IS PRAYING TO, QUASH BY AN ORDER, WRIT OR DIRECTION IN THE NATURE OF CERTIORARI, THE NOTIFICATION BEARING NO. 13/2017- CENTRAL TAX (RATE) DATED. 28.06.2017 ISSUED BY THE RESPONDENT NO.2 IN ANNEXURE-E TO THE EXTENT IT SEEKS TO IMPOSE TAX ON ROYALTY PAID ON MINING TO THE GOVERNMENT UNDER THE REVERSE CHARGE MECHANISM AS UNLAWFUL, ILLEGAL, VOID-AB-INITIO AND ULTRA VIRES THE GOVERNMENT OF INDIA AND THE CENTRAL GOODS AND SERVICES TAX, 2017 ALONG WITH THE ATTENDANT ACTIONS. QUASH BY AN ORDER, WRIT OR DIRECTION IN THE NATURE OF CERTIORARI, THE NOTIFICATION BEARING NO. 13/2017 DATED 29.06.2017 ISSUED BY THE RESPONDENT NO.3 IN ANNEXURE-F TO THE EXTENT IT SEEKS TO IMPOSE TAX ON ROYALTY PAID ON MINING TO THE GOVERNMENT UNDER THE REVERSE CHARGE MECHANISM AS UNLAWFUL, ILLEGAL, VOID- AB-INITIAO AND ULTRA VIRES THE CONSTITUTION OF INDIA AND THE KARNATAKA GOODS AND SERVICES TAX ACT, 2017 ALONG WITH THE ATTENDANT ACTIONS. QUASH BY A ORDER,

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NC: 2025:KHC-D:2587 WP No. 105203 of 2023

WRIT OR DIRECTION IN THE NATURE OF CERTIORARI, THE NOTIFICATION BEARING NO. 164/20/2021-GST DATED 06.10.2021 IN ANNEXURE-G ISSUED BY THE RESPONDENT NO.2 AS UNLAWFUL, ILLEGAL, VOID-AB-INITIO AND ULTRA VIRES TO THE CONSTITUTION OF INDIA AND THE PROVISIONS OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 ALONG WITH THE ATTENDANT ACTIONS. QUASH BY AN ORDER, WRIT OR DIRECTION IN THE NATURE OF CERTIORARI, THE NOTIFICATION BEARING NO. KSA/GST.CR-05/2019-20 DATED 11.10.2021 IN ANNEXURE-H ISSUED BY THE RESPONDENT NO. 4 AS UNLAWFUL, ILLEGAL, VOID-AB-INITIO AND ULTRA VIRES TO THE CONSTITUTION OF INDIA AND THE PROVISIONS OF THE KARNATAKA GOODS AND SERVICES TAX ACT, 2017 ALONG WITH THE ATTENDANT ACTIONS. QUASH BY AN ORDER, WRIT OR DIRECTION IN THE NATURE OF CERTIORARI, THE FORM ADT-02 BEARING REF. NO. 36941 DATED. 28.12.2022 IN ANNEXURE-C ISSUED BY THE RESPONDENT NO.1 AS UNLAWFUL, ILLEGAL, VOID-AB-INITIO AND ULTRA VIRES TO THE CONSTITUTION OF INDIA AND THE PROVISIONS OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND KARNATAKA GOODS AND SERVICES TAX ACT, 2017 ALONG WITH THE ATTENDANT ACTIONS. GRAND SUCH OTHER RELIEF THAT THIS HON’BLE COURT MAY THINK FIT INCLUDING THE COST OF THIS PETITION IN THE INTEREST OF JUSTICE AND EQUITY.

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NC: 2025:KHC-D:2587 WP No. 105203 of 2023

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

ORAL ORDER

(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)

Learned counsel for the petitioner files a memo seeking to withdraw the petition. 2. In terms of the memo so filed, petition is disposed as withdrawn.

Sd/- (M.NAGAPRASANNA) JUDGE

RHR/- List No.: 1 Sl No.: 180

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