Srishail Mallikarjun Trading Company Vs Commercial Tax Officer (Karnataka High Court)
Summary: The Karnataka High Court, Kalaburagi Bench, allowed the writ petition of M/s. Srishail Mallikarjun Trading Company challenging the adjudication order dated 23.12.2025. The petitioner contended that the same officer who recorded short-payment observations in the audit report under Section 65(6) of the CGST/KGST Act subsequently issued the show-cause notice and passed the adjudication order. The Court noted that the audit report for 2021-2022, the notice under Section 73(1), and the impugned order involved the same designated officer, Anand.
Following the coordinate Bench’s decision in M/s Presidency Builders and Developers v. The Deputy Commissioner of Commercial Taxes, and noting that the State’s counsel accepted remand for consideration by another officer, the Court set aside the adjudication order. It directed the Joint Commissioner for Commercial Tax to assign the matter to a proper officer other than the respondent and ordered reconsideration from the stage of submitting a reply to the show-cause notice dated 22.09.2025. The petitioner was permitted to raise all contentions, including objections concerning the audit report, and submit replies, pleadings and documents, with sufficient and reasonable opportunity of hearing.
The petitioner was required to appear before the concerned officer on 13.10.2026 without awaiting further notice; failure to appear would result in automatic recall of the Court’s order without further reference to the Bench or further orders.
Cases Discussed
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This petition is filed seeking for the following reliefs:
“a) Issue a writ of certiorari or any other appropriate writ, order or direction, quashing the impugned adjudication order bearing No.CTO(Audit)-5/KLB/AdjOrder/2025-26 dated 23.12.2025, passed u/s 73(9) of the Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017 by respondent produced at Annexure-C;
b) Declare that the adjudication proceedings culminating in the impugned order are without jurisdiction and contrary to law, inasmuch as the very same officer who conducted the audit u/s 65 of the CGST/KGST Act;
c) Consequently, remand the proceedings to the jurisdictional authority with a direction that the show cause notice bearing No.CTO(Audit)-5/KLB/DRC-01/2025-26 dated 22.09.2025 dated 22.09.2025, produced at Annexure-B, be adjudicated afresh by a competent adjudicating authority other than the officer who conducted the audit and issued the show cause notice, after affording the petitioner a reasonable opportunity of hearing and in accordance with law;
d) Pass such other writ, order or direction as this court may deem fit in the facts and circumstances of the case.”
2. Learned counsel for the petitioner submits that an officer who has come to a conclusion that there is a short payment of tax by the petitioner which can be noticed from the Audit Report under Section 65(6) of the Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017 (for short, ‘the CGST/KGST Act’), the very same officer issues show-cause notice at Annexure-B and passes the impugned order which is impermissible. It is submitted that in similar circumstances the Co-ordinate Bench in the case of M/s Presidency Builders and Developers vs. The Deputy Commissioner of Commercial Taxes, Mangalore allowed the writ petition and matter was remitted back to be reconsidered afresh.
3. Learned AGA supports the impugned order and submits that the matter can be remitted back for fresh consideration by another officer.
4. I have heard the arguments of learned counsel for the petitioner and learned AGA for the respondent.
5. It is to be noticed that the petitioner was issued with an Audit Report under Section 65(6) of the CGST/KGST Act for the year 2021-2022. The Audit Report produced at Annexure-A indicates that the said observation is by a designated officer named Anand. It is further noticed that the very same officer issued show-cause notice under Section 73(1) of KGST and CGST Act, 2017 to the petitioner indicating the payment of tax. The very same officer adjudicates the lis and passes the impugned order on 23.12.2025.
6. It is to be noticed that the Co-ordinate Bench in the case of M/s Presidency Builders and Developers referred to supra, considering a similar issue held that it would be appropriate to remand the matter back directing to assign the matter to any person/any officer other than the respondent. Considering the aforesaid order and taking note of the fact that there is similarity in the case on hand, I proceed to pass the following:
ORDER
(i) The Writ Petition is allowed.
(ii) The impugned order dated 23.12.2025 passed by the respondent at Annexure-C is set aside.
(iii) The Joint Commissioner for Commercial Tax is directed to assign the matter to any person/any proper officer other than the respondent who has passed the impugned order.
(iv) The matter is remitted back to the concerned respondent for reconsideration afresh from the stage of submitting reply to the show-cause notice dated 22.09.2025 in accordance with law.
(v) Liberty is reserved in favour of the petitioner to raise all contentions including the contentions as regards audit report, which shall be considered by a proper officer, who shall proceed further, in accordance with law.
(vi) The petitioner shall appear before the concerned officer on 13.10.2026 without awaiting further notice from the respondent, failing which the present order shall stand recalled automatically, without further reference to the Bench and without further orders.
(vii) Liberty is reserved in favour of the petitioner to submit replies, responses, pleadings, documents etc., which shall be considered by the respondent, who shall provide sufficient and reasonable opportunity to the petitioner, hear him and proceed further, in accordance with law.
