Petition Challenging Tax Intimation Under Section 73(5) of KGST/CGST Act Dismissed as Premature, No Show Cause Issued.

In the case before the Karnataka HC, the petitioner contested an "intimation of tax" under Section 73(5) of the KGST/CGST Act, 2017, concerning tax on royalty. The court determined the writ petition to be premature, as no show cause notice under Section 73(1) had been issued, nor any order under Section 73(9) passed. The court rejected the petition, noting that the intimation permits the petitioner to pay the tax or submit objections, with further proceedings contingent on the petitioner's response.

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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.

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