ORDER : 1. The petitioner is engaged in the business of trading of electronic goods on Amazon [an On-line Retailer] and is registered under the Central Goods and Services Tax Act, 2017 [CGST Act]/Karnataka Goods and Services Tax Act, 2017 [KGST Act]. The petitioner has filed this petition impugning the Show Cause Notice dated 30.09.2023 under Section 73(1) of the KGST Act read with the relevant provisions of the CGST Act and Integrated Goods and Services Tax Act, 2017 [IGST Act] which is also in Form GST DRC - 01. 2. The petitioner, in addition to impugning the notice dated 30.09.2023 [impugned Show Cause Notice], has also sought for further reliefs which read as under: “(c) To issue order(s) or directions in the nature of Mandamus holding that reversal under Section 17(5)(h) of the CGST Act, 2017 cannot be sought on presumptive basis by the Respondent No. 1. (d) To issue order(s) or directions in the nature of Mandamus holding that the Petitioner is neither liable to pay interest under Section 50 of the CGST Act nor can penalty under Section 122(2)(a) can be imposed on them. (e) To issue order(s) or directions in the nature of Certiorari quashing endorsement notice issued by Respondent No. 3 from File No. Adcom/Enf/SZ/ACCT-24/INS-20/2022- 23 dated 03.08.2022 at Annexure-F as arbitrary, vague and in contradiction to the provisions of the CGST/KGST and violative of Article 265 of the Constitution.” The impugned Show Cause Notice has two parts viz., Part -I, which relates to Input Tax Credit [ITC] availed but disallowed for not complying with the requirements of Section 16(2) and Section 15 of the CGST Act and the relevant Rules, and Part - II, which relates to alleged short declaration of Outward Supply and excess claim of ITC in Karnataka. 3. Sri. G. Shivadass, the learned Senior Counsel for the petitioner, at the outset submits that the petitioner is categorical that its grievance, as of this stage, is limited to Part- II, and if such grievance is favoured by this Court, the proceedings could be restored to the stage of FORM GST DRC-01A as contemplated under Section 73(5) of the KGST Act with opportunity to the petitioner to file further reply and liberty to the respondents to reissue Show Cause Notice under Section 73[1] of the CGST/KGST Act. Sri. Sri. G. Shivadass, insofar as Part-1 of the Show Cause Notice, submits that the petitioner, because the Show Cause Notice is issued well within the prescribed time, will not raise the question of limitation in the event the writ petition is disposed of at the first instance. 4. This Court must observe that even if the petitioner's grievance with Part - II of the Show Cause Notice is favoured, and the proceedings is restored to the first respondent for reconsideration before issuance of notice under Section 73(1) of the KGST Act, the respondents, subject to this Court's observation herein, must also be at liberty to issue Show Cause Notice on both Part - I and Part - II of the notice without being impeded by the question of limitation. 5. The petitioner's Books of Accounts have been audited as contemplated under Chapter XIII of the KGST Act; and that during the enforcement under Chapter XIV of the KGST Act, the petitioner's representatives, when called upon to furnish records for inspection and give statements, have appeared before the proper officer and furnished documents and given certain statements. It is contended on behalf of the petitioner that the details furnished validate the petitioner's case that the transactional price [the price actually paid for the supply of goods and services by a recipient who is not related] received from the end customers without any addition is declared in the Returns. 6. The second respondent has issued Investigation Endorsement dated 03.08.2022 to the petitioner alleging that the petitioner has short declared Outward Supply and there is excess claim of ITC in Karnataka observing that the details of the sales as per FORM GSTR 3B and FORM GSTR 9C is in a sum of Rs. 15,377 crores but the value of the petitioner's Inward supply should be taken to be Rs. 16,025 crores. The second respondent in issuing this Investigation Endorsement has in effect opined that the petitioner's sales could not have been for a value lesser than the value of Inward Supply and therefore, the value of the Outward Supply must be taken with an addition of 10% thereof as profit to determine whether there is short payment of tax. 7. Sri. The second respondent in issuing this Investigation Endorsement has in effect opined that the petitioner's sales could not have been for a value lesser than the value of Inward Supply and therefore, the value of the Outward Supply must be taken with an addition of 10% thereof as profit to determine whether there is short payment of tax. 7. Sri. G. Shivadass submits that the petitioner's specific case is that it does not maintain a uniform pricing range across India as a matter of effective business practice and the price charged to its end customers will vary depending on the place of sale and time of sale, and that the petitioner has filed Returns as required under the provisions of KGST Act declaring sales turn over based on the actual realization of the price [transactional price] from the customers in Karnataka without any addition of any kind and none of such customers are related parties. 8. Sri. G. Shivadass further submits that upon receipt of this Investigation Endorsement, the petitioner has filed reply on 10.08.2022 setting forth the circumstances such as above and asserting that the dispositive fact, given the provisions of Section 15(1) of the KGST Act, would be the transactional value without any addition, and that the proceedings cannot be initiated only because the transactional value in Karnataka is lower or lesser than the transactional value for the same supply in other States. 9. Sri. G. Shivadass argues that despite this Reply dated 10.08.2022, the petitioner is issued with intimation in FORM GST DRC-01A on 22.09.2023 reiterating the findings in the enforcement proceedings vide the Investigation Endorsement dated 03.08.2022. The petitioner, in response, has once again reiterated that the transactional value is the dispositive factor asserting that there cannot be any proceedings on the ground that there is short declaration of Outward Supply or excess claim of ITC when the declarations are filed on the transactional value without any additions and the transaction is indisputably with unrelated parties. 10. Sri G. Shivadass canvasses that if Intimation in Part A of FORM GST DRC- 01A issued is thus on 22.09.2023, the impugned Show Cause Notice in FORM GST DRC-01 is issued on 30.09.2023 repeating the contents of the Investigation Endorsement dated 03.08.2023 and the Intimation in Part A of FORM GST DRC-01A dated 22.09.2023 without considering the petitioner's specific case. Sri G. Shivadass canvasses that if Intimation in Part A of FORM GST DRC- 01A issued is thus on 22.09.2023, the impugned Show Cause Notice in FORM GST DRC-01 is issued on 30.09.2023 repeating the contents of the Investigation Endorsement dated 03.08.2023 and the Intimation in Part A of FORM GST DRC-01A dated 22.09.2023 without considering the petitioner's specific case. Sri G. Shivadass contends that the first respondent could assume jurisdiction to issue notice under Section 73[1] of the KGST Act only when it could reasonably be opined that the petitioner has short declared Outward Supply or there is excess claim of ITC, but the first respondent has not examined the said aspects in the backdrop of the material on record and the provisions of Section 15 of the KGST Act. 11. Sri. Sri G. Shivadass further canvasses that the provisions of Section 15 of the KGST Act, in categorical terms, delineate the dispositive factor that the taxability would be only on the transactional value i.e., the price paid by the purchaser who is not a related person contending that the price charged is the decisive factor, but the first respondent has issued the impugned Show Cause Notice, even after submission in Part B of FORM GST DRC-01A under Rule 142(1A) of the GST Rules, assuming jurisdiction without considering this salient, and as such, the issuance of such notice is arbitrary. 12. Sri Shamanth Naik, the learned High Court Government Pleader for the respondents, while supporting the impugned notice and imploring this Court to ensure that the Revenue's interest is not jeopardized in any manner, submits that the petitioner cannot have any grievance with the issuance of the impugned Show Cause Notice as the petitioner would have the advantage of filing appropriate response before the liability is crystallized as contemplated under Section 73(9) of the KGST Act. Sri Shamanth Naik also endeavors to persuade this Court to accept that the first respondent is justified in assuming jurisdiction to issue notice under Section 73(1) of the KGST Act when the officer, on receipt of formal information, could opine that there is short payment of tax as contemplated under Section 73 of the KGST Act. 13. Sri Shamanth Naik also endeavors to persuade this Court to accept that the first respondent is justified in assuming jurisdiction to issue notice under Section 73(1) of the KGST Act when the officer, on receipt of formal information, could opine that there is short payment of tax as contemplated under Section 73 of the KGST Act. 13. The rival submissions are considered and the questions for examination by this Court will be: (a) Whether this Court can opine that the first respondent has considered the reply filed on 27.09.2023 by the petitioner in response to the intimation in FORM GST DRC-01A dated 22.09.2023. (b) If reasonably it could be opined that such reply has not been duly considered, should the proceedings be restored to the stage of reply to FORM GST DRC-01A for further consideration in the light of the petitioner's specific stand that the question of limitation will not be raised. 14. The Investigation proceedings preceding issuance of the Intimation in Part- A of FORM GST DRC-01A dated 22.09.2023 and the petitioner's response in such proceedings are not disputed. It is seen from the Investigation Endorsement dated 03.08.2022 that the second respondent has recorded that there is short declaration of Outward Supply based on the value of Inward Supply and the Sales Turn over as declared in the relevant Returns. The petitioner has filed detailed response on 10.08.2022 reiterating that it was offering different prices across states and at different time as a matter of business practice. The material part of this reply are as hereunder: “6. In any case, the Company is hereby making the following submissions on each of the grounds on which the demand of GST is proposed in the endorsement: Submissions with respect to the proposal of the short declaration of the outward supply: (i) The impugned endorsement seeks to compare the sum of the total purchase value of the goods and expenses incurred towards services by adding an adhoc Gross Profit of 10% to the cost of the goods sold to arrive at the purported sale value and thereby determine the short declaration of the outward supply turnover by the Company. (ii) In this regard, it is submitted that Section 15 of the KGST Act provides for the valuation of outward supplies by adopting 'transaction value i.e., the consideration received/ receivable by the supplier when the supplier and recipient are not related, and the price is the sole consideration. The transaction value can be rejected only in following two scenarios: (a) when the parties are related, and (b) when the price is not the sole consideration. In the present case, we submit that the entirety of the goods sold is sales made to end customers who are unrelated parties (except transactions with units in other states which are distinct persons). Further, the transaction value (price) is the sole consideration. Hence, applying the notional value of 10% gross profit on the cost of goods sold and services rendered is without any legal basis and thus not legally sustainable. (iii) Additionally in respect of goods supplied to other units of the Company located in different states, the Company has discharged GST by adopting cost of purchase, in terms of Rule 28 of the Karnataka Goods and Services Tax Rules, 2017 (hereinafter referred to as 'KGST Rules'). In respect of such supplies, there can be no redetermination of supply value by adding a notional value of 10% gross profit on the cost of goods sold and services rendered. (iv) Further the impugned endorsement applies a uniform rate of 18% on the purported short declared value of the outward supply whereas the Company, for the period under consideration, was involved in supplying goods and services attracting different rates of GST, viz. 5%, 12%, 18%.28%, etc. (v) Additionally, the Company majorly deals with electronic products which operate on thin margins across the industry owing to various external factors like imports, competitive environment, etc. Hence, applying an adhoc gross profit of 10% on the cost of goods sold and services rendered, which is not prescribed under any of these provisions of GST law is completely baseless and not legally sustainable.” 15. The intimation in Part A of FORM GST DRC - 01A is issued on 22.09.2023 reiterating the figures but without any reason on how the petitioner's contention in response to the Endorsement dated 03.08.2022 [that the transaction value will be dispositive] is not relevant. The intimation in Part A of FORM GST DRC - 01A is issued on 22.09.2023 reiterating the figures but without any reason on how the petitioner's contention in response to the Endorsement dated 03.08.2022 [that the transaction value will be dispositive] is not relevant. Further, the petitioner, on receipt of the notice in FORM GST DRC-1A dated 22.09.2023, has filed detailed submission on 27.09.2023 again reiterating the submissions as extracted above, and the Show Cause Notice is issued on 30.09.2023. Thus, the entire process of issuance of Intimation in Part A of FORM GST DRC-01A, filing of submissions thereto and consideration thereof is completed within a period of eight [8] days. It is undisputed that 30.09.2023 was the last date of the limitation prescribed. This Court must observe that the reason for this hurried conclusion to assume jurisdiction under Section 73 of the CGST/KGST Act within the crunched period of eight [8] days, is obvious and stark; the anxiety, is to issue Show Cause Notice within time lest cause is lost by lapse of time. 16. The provisions of Rule 142(1) of the Central Goods and Service Tax Rules, 2017, prior to the Central Goods and Service Tax [Sixth Amendment] Rules, 2019 only contemplated issuance of Notice under Section 73[1], 74[1] and 76[2] and other provisions of the CGST/ KGST Act with a summary in FORM GST DRC-01. With the amendment under the aforesaid Amendment Rules with effect from 09.10.2019, Rule 142(1A) is included, and this Rule stipulates that the proper officer shall, before service of notice under Section 73 (1) [as also under Section 74(1)] of the GST Act, communicate the details of the tax, interest and penalty as is ascertained in Part A of Form GST DRC - 01A. 17. The provisions of Rule 142(1A) are again amended 1 by substituting the expression the proper officer shall, and the Rule presently reads as follows: (1) This amendment is by the Central Goods and Service Tax [Twelfth Amendment] Rules, 2019 and these Rules are amended with effect from 15.10.2020. The proper officer may, before service of notice to the person chargeable with tax, interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74, as the case may be communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC - 01A. The proper officer may, before service of notice to the person chargeable with tax, interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74, as the case may be communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC - 01A. Thus, the proper office is now given the option of issuing intimation in Part A of FORM GST DRC - 01A. Simultaneously with the introduction of Rule 142(1A) under the Central Goods and Service Tax [Sixth Amendment] Rules, 2019, Rule 142(2A) is introduced. The provisions of this Rule 2 stipulate inter alia that if the person to whom notice is issued in Part A of Form GST DRC - 01A is desirous to file any submissions against the proposed liability, such submissions can be filed in Part B of Form GST DRC - 01A. (2) Where the person referred to in sub-rule (1A) has made partial payment of the amount communicated to him or desires to file any submissions against the proposed liability, he may make such submission in Part B of FORM GST DRC - 01A. 18. Perhaps there could be some debate on the merits of the change in Rule 142(1A) in providing that the Proper Officer may communicate the details in Part A of FORM GST DRC - 01A before issuance of notice under Section 73(1) of the GST Act, but there cannot be any debate about the requirement that once the intimation is issued in Part A of FORM GST DRC-01A communicating the details of any tax, interest and penalty as ascertained and submissions are filed in Part B of Form GST DRC 01A under Rule 142(2A) against such proposal, the proper officer must reason why the submissions filed cannot be accepted before assuming jurisdiction to issue notice under Section 73(1) of the GST [or under Section 74(1) or the other provisions mentioned in Rule 142(1A)]. This would be crucial because of the consequences of penalty under Section 73 of the GST Act. 19. This would be crucial because of the consequences of penalty under Section 73 of the GST Act. 19. This Court must opine that if indeed the petitioner has filed submissions, as part of its submissions in Part B of FORM GST DRC - 01A, asserting that it has offered different prices [for the same supply of goods and services] at different places and declared Returns accordingly, the implication thereof should be examined in the light of the provisions of Section 15 3 of the KGST Act for a reasonable and just commencement of the proceedings under Section 73(1) of the GST Act. 20. The petitioner's grievance insofar as issuance of impugned notice incorporating Part-II thereof must necessarily be examined in the light of this requirement and the fact that the notice does not refer to the submissions filed in reply to the notice in Part B of FORM GST DRC-01A and though this Court can see the reason for issuance of the impugned Show Cause Notice before 30.09.2023 but when the infirmity as aforesaid is obvious, this Court must intervene under Article 226 of the Constitution of India and pass just and reasonable order to ensure that the proceedings prevail in accordance with the requirement of law. The questions framed are answered accordingly, and hence, the following: (3) Section 15. Value of taxable supply.-(1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. [Note: The other provisions of this section mention what the 'transaction value' should and should not include] ORDER: The petition is allowed-in-part and the impugned Show Cause Notice dated 30.09.2023 is quashed but with the following liberties: (A) The petitioner shall be at liberty to file further submissions in continuation of the submissions filed on 27.09.2023. (B) The respondents shall examine these submissions in the light of the material already on record including the materials secured during the proceedings under Chapter XIII of the KGST Act and if there could be opinion that there is short fall of payments made, then proceed to issue notice under Section 73(1) of the KGST Act covering Part-II. (B) The respondents shall examine these submissions in the light of the material already on record including the materials secured during the proceedings under Chapter XIII of the KGST Act and if there could be opinion that there is short fall of payments made, then proceed to issue notice under Section 73(1) of the KGST Act covering Part-II. (C) The first respondent in issuance of such notice shall not be impeded by the question of limitation in the light of the positive statement made before this Court that such question will not be raised. It is needless to observe that the first respondent will be at liberty to issue notice insofar as Part-I as there is no challenge to the same in the present proceedings.