Mk Travels Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)
SThe Karnataka High Court examined a writ petition challenging multiple proceedings initiated under the Karnataka Goods and Services Tax Act, 2017 for the tax period July 2017 to March 2018. The petitioner sought quashing of an order passed under Section 73 of the KGST Act, its summary issued under Rule 142(5) of the KGST Rules, and a recovery notice issued under Section 78 of the KGST Act. The dispute arose from an audit observation where the Deputy Commissioner confirmed tax and interest demand on the ground that the petitioner had not produced invoices endorsed by the authorised officer of the Special Economic Zone, as contemplated under Rule 30(4) of the Special Economic Zones Rules, 2006, read with a circular dated 12.09.2019.
The petitioner contended that except for one audit observation, all other observations were decided in its favour. The adverse finding was based solely on non-production of SEZ-authorised invoices. It was argued that Rule 30(4) of the SEZ Rules was amended with effect from 21.09.2018, mandating such endorsement, and that the amendment, along with the circular dated 12.09.2019 relating to the DTA Service Procurement Form, was prospective in nature. Since the impugned tax period was prior to 21.09.2018, reliance on the amended rule and the circular was contended to be erroneous and without authority of law.
