Sumukha Ventures Vs Joint Commissioner of Commercial Taxes (ADMN.) (Karnataka High Court)
The Karnataka High Court considered a petition challenging an Order-in-Original and a show-cause notice issued in GST proceedings. The petitioner argued that proceedings had been initiated both by the audit authority and the enforcement authority. It was further contended that the same officer who conducted the audit proceedings had also passed the Order-in-Original. According to the petitioner, this violated the principles of natural justice because the officer had already expressed opinions and recorded findings during the audit stage, which could influence the subsequent adjudication proceedings.
The petitioner also relied on Circular No. 31/05/2018-GST, dated 9th February, 2018 and Circular No. 169/01/2022-GST dated 12th March, 2022, contending that such a procedure was not permissible under assessment proceedings conducted by the Central Authority. The State opposed the petition by arguing that the petitioner had not raised the objection before the authority earlier and that the issue should first be considered by the adjudicating authority. It was also argued that the cited circulars applied only to Central Authorities and were not binding on State Authorities in the absence of a similar notification.
The High Court observed that identical issues were frequently being raised by assessees and held that the matter required adjudication by the appropriate authority. The Court kept all contentions open and remitted the matter to respondent No.2 for reconsideration. The petitioner was permitted to raise objections regarding jurisdiction before the authority concerned. The Court further observed that the authority could obtain necessary administrative orders from the Joint Commissioner of Commercial Taxes (Administration), who had assigned the case.
