Rajapur Minerals Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)
The Karnataka High Court allowed the writ petition filed by Rajapur Minerals challenging a series of proceedings under the Karnataka Goods and Services Tax Act, 2017, including the audit report in Form GST ADT-02 dated 13.12.2023, intimation in Form GST DRC-01A dated 14.12.2023, show cause notice dated 23.12.2023, summary in Form GST DRC-01, Order-in-Original dated 20.03.2024, consequential Form GST DRC-07, proceedings/authorization under Section 78, Order-in-Appeal dated 27.06.2025, garnishee notice in Form GST DRC-13 dated 04.10.2025 and Form DRC-09 dated 03.12.2025. Alternatively, the petitioner sought remand of the matter to the stage of hearing on the show cause notice.
The principal challenge was founded on the fact that respondent No.1, the Deputy Commissioner of Commercial Taxes (Audit)-2, had conducted the audit proceedings under Section 65(6) of the KGST Act and thereafter the very same officer issued the show cause notice under Section 73(1) read with Sections 50 and 122 and ultimately passed the Order-in-Original. The petitioner contended that combining these functions in the same officer was impermissible and created a reasonable apprehension of bias, thereby vitiating the adjudication for violation of the principles of natural justice.
The petitioner relied upon M/s. Presidency Builders and Developers Vs. The Deputy Commissioner of Commercial Taxes and Another. In that matter, the audit report, show cause notice and final order had similarly been issued by the same officer. The Coordinate Bench had set aside the impugned order and recovery proceedings and directed that the matter be assigned to another proper officer for fresh consideration from the stage of reply to the show cause notice.
