Case Details: Ramms India Pvt. Ltd. vs. Deputy Commissioner of Commercial Taxes (AUDIT), Bengaluru (2026) 38 Centax 233 (Kar.)
Judiciary and Counsel Details
- S.R. Krishna Kumar, J.
- Shri Lakshmi Menon, Adv., for the Petitioner.
- Smt. Jyoti M. Maradi, HCGP & Shri Vignesh Shetty, Adv., for the Respondent.
Facts of the Case
The petitioner-assessee, a separate legal entity, challenged the authorities’ recovery of GST dues from its bank account, even though the dues were originally adjudicated against another entity. Both entities had a common Director, but the show-cause notice under Section 73 of the Karnataka GST Act and the adjudication order were issued solely against the other entity. The petitioner-assessee submitted that it was neither a garnishee nor liable to pay any dues of the other entity and that merely having a common Director could not justify lifting the corporate veil. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that recovery of tax dues from the petitioner-assessee was impermissible, as it was an independent juristic entity separate from the entity against whom adjudication was made. It was observed that the show-cause notice and adjudication were specifically directed against the other entity, and the petitioner-assessee could not be held liable for its dues. The Court further held that common directorship alone cannot form a basis for lifting the corporate veil. Relying on Section 79 of the CGST Act and the Karnataka GST Act, and Article 226 of the Constitution of India, the petition was allowed and recovery from the petitioner-assessee was declared illegal.
List of Cases Cited
- Galaxy International v. UOI — (2025) 32 Centax 212 (Bom.) — Followed [Para 5, 9]
- SJR Prime Corporation (P.) Ltd. v. Superintendent of Central Tax — W.P. No. 35114 of 2024, dated 9-4-2025 by Karnataka High Court — Followed [Para 5, 8, 9]
