Karnataka High Court
Arbitration Clause In Partnership Reconstitution Deed Not Enforceable Against Non-Signatory: Karnataka High Court
The Karnataka High Court has held that an arbitration clause contained in a partnership reconstitution deed cannot be enforced b a person who has not signed the deed, and that in such circumstances, the court cannot appoint an arbitrator under the Arbitration and Conciliation Act. Justice Lalitha Kanneganti made the observation in an order dated January 7 while hearing a petition filed by two outgoing partners of Shree Raghavendra Industries, seeking appointment of an arbitrator under an...
Karnataka High Court Refuses Daughter's Plea For Parents' Interim Bail In GST Evasion Case
The Karnataka High Court has declined to grant interim bail to a husband and wife arrested in a GST enforcement action, holding that the case did not present circumstances warranting the court's intervention at the writ stage. A Single Judge Bench of Justice M Nagaprasanna, in an order pronounced on January 12, noted that the court did not find any illegality in the manner of arrest and that statutory remedies for seeking bail were already available under criminal law. “Therefore, the facts in...
Differential GST On Pre-GST Works Contracts To Be Reimbursed By State Agencies: Karnataka High Court
The Karnataka High Court ruled that the additional GST liability arising out of the shift from the pre-GST VAT (Value Added Tax) regime to the GST regime in ongoing works contracts cannot be imposed on contractors.The bench consists of Justice M Nagaprasanna, who directed the State Departments and government agencies to reimburse the differential GST to contractors.All the contracts were awarded prior to July 2017 under the KVAT regime, where the contract rates factored in VAT and...
Karnataka HC Quashes GST Refund Rejection, Says Limitation Runs From Original Application, Not Revised Filing
The Karnataka High Court has quashed the rejection of a GST refund claim as time-barred, holding that the limitation period must be computed from the date on which the taxpayer originally applied for the refund and not from a revised application filed after a deficiency memo. The bench of Justice S R Krishna Kumar observed that, in the instant case, the refund application filed on July 4, 2024 was well within the prescribed limitation period and that a subsequent application filed pursuant to a...
Mandatory Pre-Deposit For Customs Appeal Cannot Be Waived For Financially Sound Appellant: Karnataka High Court
The Karnataka High Court has held that the mandatory pre-deposit required to pursue a customs appeal cannot be waived for a financially sound appellant/importer. In a recently uploaded order pronounced on November 7, 2025, Justice M. Nagaprasanna said the pre-deposit under Section 129-E of the Customs Act does not deny access to justice. “It is a statutory discipline that applies uniformly to all appellants. The statute's mandate endures, subsists and is unyielding, until constitutional...
IGST | Marketing & Technical Support Services To Foreign Parent Qualify As Export Of Services, Not Intermediary: Karnataka High Court
The Karnataka High Court held that marketing and technical support services provided by the assessee to its foreign parent qualify as export of services under the IGST Act (Integrated Goods and Services Tax) and do not constitute intermediary services. Justice S.R. Krishna Kumar noted that the place of supply of these services is outside India, satisfying all conditions for export of services, and the assessee is eligible for a refund of IGST paid. In the case at hand, the assessee/petitioner...
Custodial Interrogation Not Mandatory For GST Offences Punishable Up to 5 Years: Karnataka High Court Grants Bail In ₹31 Cr Tax Evasion Case
The Karnataka High Court held that custodial interrogation is not mandatory in GST offences punishable with imprisonment up to five years, even though such offences are economic in nature. The bench further stated that the prescribed punishment under the CGST (Central Goods and Services Tax) Act must be considered while determining the gravity of the offence.Justice Shivashankar Amarannavar stated that one of the most prominent criminal sanctions imposed with regard to economic offences is that...
Flavoured Milk Is Not 'Beverage'; Taxable At 5% GST: Karnataka High Court Provides Relief To Dodla Dairy
The Karnataka High Court held that flavoured milk qualifies as a dairy product under Tariff Heading 0402 and not as a 'beverage' under Tariff Heading 2202. Consequently, GST at 5% will be applicable on flavoured milk instead of 12%. Justice S.R. Krishna Kumar examined the classification of the flavoured milk under the GST, considering whether it falls under Tariff Heading 2202 (beverages containing milk) or under Tariff Heading 0402 (milk and cream, containing added sugar or...
No GST On Liquidated Damages For Breach Of Contract: Karnataka High Court Quashes SCN
The Karnataka High Court held that liquidated damages recovered for breach or delay in contractual obligations are compensatory in nature and do not constitute consideration for any supply under GST. Justice S.R. Krishna Kumar examined whether the amount paid as compensation by the Lending Service Provider (LSP) to the assessee constituted 'liquidated damages' and whether such amount was taxable under the provisions of the CGST Act. In the case at hand, the assessee/petitioner was...
Order Deciding Director's Authority Is Not An Arbitral Or Interim Award, Not Open To Section 34 Challenge: Karnataka High Court
The Karnataka High Court has held that an order passed by an arbitral tribunal deciding a preliminary or a factual issue such as whether the directors were authorised to execute agreements does not amount to an arbitral award or an interim award and therefore cannot be challenged under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act"). A Division Bench comprising Justice Anu Sivaraman and Justice Vijaykumar A. Patil allowed a commercial appeal and set aside...
Non-Signatory Developer Can Be Impleaded In Arbitration If Conduct Shows Intent To Be Bound: Karnataka High Court
The Karnataka High Court has refused to interfere with an arbitral tribunal's decision impleading a non signatory company in arbitration proceedings holding that where conduct, agreements and commercial involvement of a party demonstrates clear intent to be bound by the arbitration agreement, the Group of Companies would apply. A Division Bench of Justice Jayant Banerji and Justice Umesh M Adiga dismissed a writ petition filed by Mantri Developers Pvt. Ltd., challenging a majority order...