Imran K. Madiwale Vs State of Karnataka (Karnataka High Court)
Summary: The Karnataka High Court allowed Imran K. Madiwale’s writ petition and quashed the ex parte GST order dated 23 August 2024. The petitioner challenged Form GST DRC-07 bearing RFN ZD290824097503W and the detailed order under Section 73(9) of the CGST/KGST Act, 2017, alleging lack of jurisdiction and breach of natural justice. The Court noted counsel’s submission that the authorities had taken no further steps apart from issuing a notice to the bank for attachment or freezing of the account and taking steps for attachment of properties. The Court found that the second respondent had initiated the audit under Section 65, completed the audit report, issued notice and adjudicated the demand. It held that the officer who initiated the audit could not issue notice and adjudicate the matter.
The Court directed the Joint Commissioner for Commercial Taxes to assign the matter to a different proper officer for fresh consideration from the stage of replying to the Form GST DRC-01A intimation under Section 73(5) dated 17 May 2024. The petitioner may raise all contentions, including objections to the audit report, which the newly assigned officer must consider.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Counsel Sri. Pramod S. Yadawad and Smt.Bhagyashri N. Usulkr., for the petitioner and Smt. Nandini B. Somapur, AGA for the respondents have appeared in person.
2. The Writ Petition is filed seeking following reliefs:
“a) Issue a writ of Certiorari or any other appropriate writ, order or direction, quashing the impugned ex- parte order in Form GST DRC-07 bearing RFN- ZD290824097503W alongwith detailed order passed under section 73(9) of the CGST/KGST Act, 2017 dated 23.08.2024 (Annexure-C), as being illegal, arbitrary, without jurisdiction and violative of principles of natural justice;
b) Pass such other order(s) or direction(s) as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity.”
3. Counsel for the respective parties presented several contentions.
Counsel for the petitioner, in advancing his arguments, submits that pursuant to the final order, the Authorities have not initiated any further proceedings except issuing notice to the bank for attachment/freezing of the account and attachment of the properties. The oral submission is noted.
4. The arguments were heard and the papers perused with due care.
5. The second respondent initiated an audit under Section 65 of the Goods and Services Tax Act, 2017 and completed the audit report. The same Officer thereafter issued notice, conducted adjudication proceedings, and passed the final order. The respondent, having initiated the audit proceedings, could not have issued notice and adjudicated the matter.
6. In view of the above, the matter requires remand. Resultantly, the impugned order dated 23.08.2024 passed by respondent No.2 vide Annexure – C is quashed.
7. The Joint Commissioner for Commercial Taxes is directed to assign the matter to any person/any proper Officer other than the respondent No.2, who passed the impugned order. The matter is remanded for reconsideration afresh from the stage of submitting a reply to the state of intimation of tax ascertained as being payable under Section 73(5) of the Act in Form GST DRC-01A dated 17.05.2024. The petitioner may raise all contentions, including the contentions as regards the audit report, which shall be considered by the proper officer, who shall proceed further, in accordance with the law.
8. With the above observation, the Writ Petition is allowed and remanded.
