Case Law Details
Sameer P. Shiraguppi Vs Deputy Commissioner of Commercial Taxes (AUDIT) (Karnataka High Court)
The Karnataka High Court allowed the writ petition challenging GST audit and assessment proceedings initiated against the petitioner for the tax period 2021-2022. The petitioner sought quashing of the audit report in Form ADT-02 dated 31.07.2025, pre-intimation notice in Form GST DRC-01A dated 22.08.2025, show cause notice dated 02.09.2025 issued under Section 73(1) of the CGST/KGST Act, and the order-in-original dated 28.10.2025 along with demand summary in Form GST DRC-07.
The Court examined the authority under which the proceedings had been initiated. It noted that the Commissioner of Commercial Taxes had passed an order dated 30.01.2023 empowering the Joint Commissioner of Commercial Taxes to assign proceedings under Sections 73 and 74 of the GST Act for financial years 2017-2018 and 2018-2019. Based on that order, the Joint Commissioner subsequently assigned proceedings relating to tax period 2021-2022.
The Court held that such assignment was untenable. It observed that the Joint Commissioner derived authority only from the order dated 30.01.2023, which was valid only up to 31.12.2023. Therefore, when proceedings for tax period 2021-2022 were initiated, the Joint Commissioner no longer possessed authority to make such assignment. Consequently, the Court held that the proceedings initiated pursuant to such assignment were non-est and without jurisdiction.
Accordingly, the High Court issued writ of certiorari and quashed the pre-intimation notice in Form GST DRC-01A dated 22.08.2025, the show cause notice dated 02.09.2025, and the order-in-original dated 28.10.2025 along with demand summary in Form GST DRC-07.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Smt.Lochana S.Babu., counsel for the petitioner and Smt.Nandini B.Somapur., AGA for respondents 1 to 3 have appeared in person.
2. The petition is filed seeking following reliefs.
“(a) Issue Writ of Certiorari thereby quashing and setting aside the Audit Report issued in Form ADT-02 dated 31/07/2025, issued by Respondent No.1, Which is at ANNEXURE-G.
(b) Issue Writ of Certiorari thereby quashing and setting aside the Pre-Intimation Notice along with summary in Form GST DRC-01A dated 22-08-2025, issued by Respondent No.1, as annexed at ANNEXURE-H.
(c) Issue Writ of Certiorari thereby quashing and setting aside the Show Cause Notice under Section 73(1) along with summary, dated 02-09-2025, issued by Respondent No.1, as annexed at ANNEXURE-J.
(d) Declare that an audit conducted under Section 65 of the CGST/KGST Act Nul and void as cannot be conducted ex parte, must be based on proper verification of records and facts, and that no adverse conclusion or demand can be raised merely on assumptions without affording the Petitioner a reasonable opportunity to present its case.
(e) To grant such other relief as the Hon’ble court may deem fit in the interest of justice and equity.
(f) Issue writ of certiorari thereby quashing and setting aside the order in original dated:28.10.2025 along with summary of demand in Form GST DRC-07 issued by respondent No.1 vide ANNEXURE-K.”
3. Counsel for the respective parties urged several contentions. AGA justified the action on the part of the respondents and submits that the writ petition is devoid of merits and the same may be dismissed.
4. Heard the arguments and perused the papers with care.
5. The Commissioner of Commercial Taxes passed an order on 30.01.2023 empowering the Joint Commissioner of Commercial Taxes to assign proceedings under Sections 73 and 74 of the GST Act, for the 2017-2018 and 2018-2019 financial years. Based on an order dated January 30, 2023, the Joint Commissioner then made an assignment to initiate proceedings for the year 2021-2022 tax period. This is untenable. The Joint Commissioner of Commercial Taxes derived his authority from January 30, 2023, order; however, since the order was valid only until December 31, 2023, he no longer possessed the power of assignment when initiating proceedings for the year 2021-2022 tax period. The consequential proceedings pursuant are non-est and without jurisdiction. Hence, they are liable to be quashed.
6. The writ of certiorari is ordered. The Pre-Intimation Notice along with summary in Form GST DRC-01A dated 22-082025, issued by Respondent No.1, vide Annexure-H, the Show Cause Notice along with summary, dated 02-09-2025, issued by Respondent No.1, vide Annexure-J and the order in original dated:28.10.2025 along with summary of demand in Form GST DRC-07 issued by respondent No.1 vide Annexure-K are quashed.
7. Resultantly, the writ petition is allowed.
Because of disposal of the writ petition, I.A.No.4/2026 for de-freezing the Bank Accounts is allowed. The respondents are directed to de-freeze the Bank Accounts bearing Nos.017601002921, 46801000008426, 916020080258629, 911020054931755 and 909020036636820.
Author Bio
