Karnataka HC set aside consolidated GST demand order & allowed to avail Amnesty Scheme

IBC Knowledge Park (P) Ltd Vs Union of India (Karnataka High Court)

Alleged Undisputed Arrears of Tax or Interest Cannot Be Demanded Under Chapter XV of The GST Acts When Express Provisions Are Available in Law in Section 75 (12) of GST Acts

Karnataka High Court, in the case of IBC Knowledge Park (P) Ltd Vs Union of India, has set aside a consolidated order issued by the Assistant Commissioner of Central Goods and Services Tax, Bengaluru East Commissionerate. The High Court’s decision, delivered on November 22, 2023, addresses the petitioner’s challenge to a demand for alleged undisputed arrears of tax and interest under Chapter XV of the GST Acts.

IBC Knowledge Park (P) Ltd had filed a petition seeking to quash the Order-in-Original No. 191/JC1/B-East/2023, dated November 22, 2023. The petitioner contended that alleged undisputed arrears of tax or interest could not be demanded under Chapter XV of the GST Acts when express provisions, specifically Section 75(12) of the GST Acts, were available in law. The petition also sought to quash Notification No. 9/2023 dated March 31, 2023, alleging it to be ultravires the Constitution of India and provisions of the CGST Act, 2017.

The impugned order from the Assistant Commissioner encompassed financial periods ranging from 2017-18 to 2020-21. The petitioner argued that under the Amnesty Scheme, introduced by Section 128(A) of the CGST Act and effective from November 1, 2024, they were entitled to benefits for the years 2017-18, 2018-19, and 2019-20. Due to the consolidated nature of the demand order, the petitioner’s counsel submitted that the order should be set aside and the matter remitted back to the respondent for reconsideration. This reconsideration would involve passing separate orders for each financial period, allowing the petitioner to apply for the Amnesty Scheme for the eligible years. For the subsequent periods, such as 2020-21, the petitioner reserved the right to pursue other legal remedies.

The respondents, represented by their counsel, contended that the petition lacked merit and should be dismissed.

However, the High Court acknowledged the petitioner’s contention that the Order-in-Original consolidated demands for multiple financial years, including those covered by the Amnesty Scheme. The court noted that the Amnesty Scheme under Section 128(A) of the CGST Act specifically applies to the financial years 2017-18, 2018-19, and 2019-20.

Considering the petitioner’s stated intention to avail the benefits of the Amnesty Scheme, the High Court deemed it appropriate to set aside the impugned order. The matter has been remitted back to the Assistant Commissioner for fresh consideration in accordance with the law.

Judicial Precedent and Directions:

While the judgment itself did not explicitly cite specific judicial precedents within its text, the court’s decision aligns with the principle of ensuring proper application of statutory provisions and schemes, such as the Amnesty Scheme, to taxpayer liabilities. The High Court issued the following directions: