2025 (1) TMI 1510 - HC - GST

Liability to pay tax on royalty - intimation of tax issued u/s 73(5) of the KGST/CGST Act 2017 - HELD THAT - The writ petition of the petitioner is too premature and the same is liable to be rejected at this stage. A perusal of Annexure-D intimation of tax ascertained under Section 73(5) of KGST Act 2017 would reveal that it is only an intimation of ascertained tax with liberty to the petitioner to pay along with interest or to file his submission. Failing to pay the ascertained tax petitioner would be issued further notice under Section 73(1) and thereafter the Competent Authority shall have to pass order under Section 73(9) of KGST Act. Further intimation of tax ascertained at Annexure-D also provides an opportunity to file any submission of the petitioner against the said intimation itself. Since no show cause notice under Section 73(1) of KGST Act is issued and no order in terms of Section 73(9) of KGST Act is passed the present writ petition would be premature. Hence writ petition stands rejected.

Summary

In the case before the Karnataka High Court, presided over by THE HON'BLE MR JUSTICE S. G. PANDIT, the petitioner challenged an "intimation of tax" issued under Section 73(5) of the KGST/CGST Act, 2017, arguing that they are not liable to pay tax on royalty. The petitioner's counsel, Sri Ganapathi Narayana Bhat, contended that the petitioner should not be subjected to this tax liability.The Additional Government Advocate, Sri K. Hemakumar, representing the respondents, argued that the writ petition is premature. He clarified that the intimation under Section 73(5) is merely an opportunity for the petitioner to pay the ascertained tax with interest. If the petitioner fails to do so, a show cause notice would be issued under Section 73(1), followed by an order under Section 73(9), leading to demand and recovery proceedings.The court, upon reviewing the petition and relevant provisions of the KGST Act, concluded that the writ petition is premature, as no show cause notice under Section 73(1) has been issued, nor has any order under Section 73(9) been passed. Consequently, the writ petition was rejected. The court emphasized that the intimation of tax under Section 73(5) allows the petitioner to either pay the tax or submit objections, and further proceedings would only occur if the petitioner fails to respond appropriately.