Amit Engineering Works Vs Joint Commissioner of Commercial Taxes (Appeal) & Ors. (Karnataka High Court)
Summary : The Karnataka High Court at Dharwad, in Amit Engineering Works Vs Joint Commissioner of Commercial Taxes (Appeal) & Ors., considered a challenge to GST audit and adjudication proceedings relating to the tax period 2017–18. The petitioner, a proprietorship represented by Avik Kumar Goswami, challenged the appellate order dated 8 December 2025, the original adjudication order dated 31 December 2023, and the related audit report, notices and intimations. The central objection was that the same officer had conducted the audit and subsequently adjudicated the demand, besides allegedly failing to consider the petitioner’s replies properly.
The petitioner stated that it supplied tipper lorries and other automobiles to mining and quarrying businesses. Pursuant to audit authorisation dated 16 September 2022, Form GST ADT-01 was issued on 19 September 2022. The petitioner furnished records, including audited financial statements, inward-supply registers, income-tax returns and Forms GSTR-9 and GSTR-9C. The audit observation dated 6 June 2023 alleged wrongful availment of credit of ₹17,60,334, claimed equivalent interest and raised other observations.
An audit report in Form GST ADT-02 followed on 11 September 2023 and an intimation in Form GST DRC-01A was issued on 15 September 2023 under Section 73(5). The petitioner replied on 26 September 2023 and stated that certain tax components had been paid in good faith. A show-cause notice dated 30 September 2023 demanded ₹36,08,684. The petitioner responded on 18 October 2023, reiterating its claim relating to transitional credit. The adjudication order dated 31 December 2023 determined a demand of ₹38,63,934 inclusive of interest and penalty.
The petitioner filed a manual appeal, contending that a circular dated 10 November 2020 dispensed with the relevant statutory pre-deposit. However, the appellate authority dismissed the appeal for non-payment of the 10% pre-deposit. Before the High Court, the petitioner maintained that its documentary explanations had not been properly considered and that the officer responsible for the audit could not act as adjudicating officer in the same matter. The State and Central authorities defended the proceedings and argued that the objection concerning the same officer was being raised for the first time in the writ petition.
The petitioner relied on the Karnataka High Court’s order in W.P. No. 104956/2026 dated 9 October 2026, which in turn followed W.P. No. 103328/2026 dated 23 April 2026. In those proceedings, the Court had directed fresh consideration from the stage of the reply to the Section 73(5) intimation, before an officer other than the person who passed the challenged order. Although one earlier case involved an ex parte adjudication, the present petitioner asserted that it had actively participated but that its submissions were not adequately addressed. Counsel argued that the separation-of-officers objection was a legal point that could be taken in writ proceedings.
The High Court found the earlier coordinate-Bench ruling applicable to the present dispute because the audit officer and adjudicating officer were the same. It allowed the writ petition and remanded the matter for fresh consideration, directing the Joint Commissioner of Commercial Taxes to assign it to a different proper officer. The Court left all the petitioner’s contentions open, subject to depositing 10% of the tax demanded before the officer to whom the case would be assigned. The order does not adjudicate the correctness of the underlying transitional-credit claim or finally extinguish the demand.
The petitioner had also sought to challenge Central Notification No. 9/2023-CT dated 31 March 2023 and Karnataka Notification No. 06/2023 dated 6 April 2023 under Section 168A. By a memo filed at the hearing, it did not press those two prayers for the time being, citing proceedings concerning the Central notification before the Supreme Court and seeking to keep the question open as permissible in law. Accordingly, the High Court did not decide the constitutional or statutory validity of either notification. The operative remand contains an apparent date/form discrepancy—referring to ‘GST DRC-01 dated 30.09.2020’—which is reproduced as stated in the original order, although the proceedings described earlier refer to 2023.
Cases Discussed
- Karnataka High Court, W.P. No. 104956/2026; 09/10/2026 — The cited decision remanded GST adjudication to another officer after the audit officer also adjudicated; the present order quotes its reasons and directions.
- Karnataka High Court, W.P. No. 103328/2026 (T-RES); 23/04/2026 — The coordinate Bench decision quoted through W.P. No. 104956/2026 held that the officer initiating the audit should not also issue notice and adjudicate; a different proper officer was directed to reconsider the matter.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Learned counsel appearing for the petitioner today filed a memo, which reads as under:
“MEMO
The advocate for the petitioner submits that the validity of the Notification No.9/23 Dt. 31/3/23 is pending for consideration before the Hon’ble Apex Court and the daily order is enclosed as Annexure ‘S’ to the writ petition. The petitioner wishes to not press the same for the time being and the same consideration may be kept open for consideration & to be urged before the concerned Authorities as permissible under Law Subject to outcome. Hence the same may be considered and an order may be passed in accordance with Law in the interest of equity & Justice.”
2. Both learned HCGP and learned CGC have seen the memo and acknowledge the same. As per the memo, the petitioner is not pressing Sl.No.No.9 and 10 in prayer in respect of notification at Annexure-B and C. In that view of the matter, the matter is taken for final disposal with the consent of both the counsels.
3. This Writ Petition is filed by the petitioner seeking following reliefs: “i) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the Order in Appeal passed by the Respondent No.1 under section 107 of the CGST Act dated 08.12.2025 for the tax period 2017-18 vide Reference No.MA2912250352921 Copy of the Order in Appeal dated 08.12.2025 is enclosed and marked as Annexure – A.
ii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the Original passed under section 73 of the Act dated 31.12.2023 vide Office File No.CTO(Audit- 1)/HPT/GST.S.73(ORDER)/2023-24/T passed by the Respondent No.2 i.e. for the period 2017-18. Copy of the Order in Original dated 31.12.2023 is enclosed and marked as Annexure-A1.
iii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the GST Form DRC-07 bearing Reference No.ZD291223103744K dated 31.12.2023 issued by the Respondent No.2. Copy of the DRC-07 dated 31.12.2023 is enclosed and marked as Annexure-A2.
iv) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the show cause notice issued under section 73 of the Act dated 30.09.2023 vide Office No.CTO(Audit-1)/HPT/2023-24/T issued by the Respondent No.2. Copy of the Show Cause notice dated 30.09.2023 is enclosed and marked as Annexure – A3.
v) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the intimation issued under section 73 in FORM GST DRC-01 dated 30.09.2023 bearing Reference No ZD290923057837N issued by the Respondent No.2. Copy of the Form GST DRC-01 dated 30.09.2023 is enclosed and marked as Annexure-A4.
vi) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the DRC-01A Intimation issued under section 73 of the Act dated 15.09.2023 vide Office No. CTO(Audit-1)/HPT/GST/DRC- 01A/2023-24/T issued by the Respondent No.2. Copy of the Intimation under DRC-01A dated 15.09.2023 is enclosed and marked as Annexure – A5.
vii) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the intimation summary in DRC-01A issued under section 73 dated 15.09.2023 bearing Reference No ZD290223022948T issued by the Respondent No.2. Copy of the Form GST DRC-01A dated 15.09.2023 is enclosed and marked as Annexure-A6.
viii) issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the Audit Report issued under section 65(6) of the Act by the Respondent No.2 dated 11.09.2023 in GST Form ADT-02 bearing Reference No MA290923039452O. Copy of the Audit Report in Form GST ADT-02 dated 11.09.2023 is enclosed and marked as Annexure – A7.
ix) Declare that the impugned Notification No.9/2023- CT dated 31.03.2023 is illegal and ultra vires the provisions of section 168A of Central Goods and Service Act, 2017 and issue a Writ of Certiorari or any other appropriate writ or order or direction and quash the impugned Notification No.9/2023-CT dated 31.03.2023 referred as Annexure – B, issued by the Respondent No.4.
x) Declare that the impugned Notification 06/2023) dated 06.04.2023 is illegal and ultra vires the provisions of section 168A of Karnataka Goods and Service Act, 2017 and issue a Writ of Certiorari or any other appropriate writ or order or direction and quash the impugned notification 06/2023 dated 06.04.2023 referred to as Annexure – c, issued by the Respondent No.5.
xi) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”
4. The facts germane to file the present petition are as under.
5. It is the claim of the petitioner that the petitioner is proprietor concern carrying on the business in the name and style as “M/s.Amit Engineering Works”. The head office of the petitioner is located in West Bengal engaged in the business of supply of Tipper Lorries and other related automobiles to various mining quarry and its business entities. The petitioner is carrying out its principle place of business as registered under the GST portal. As the matter stood thus, the case of the petitioner was selected for audit vide Authorization No.227020938 dated 16.09.2022 from respondent No.3. In that view of the matter, respondent No.2 accordingly issued ADT-01 calling the records of the petitioner on 19.09.2022. The petitioner thereafter furnished necessary documents to the Audit Officer/respondent No.2 on 29.03.2023 and actively participated in the audit proceedings by providing various books of accounts such as Financial Audited Statement, Inward Supply Registers, Income Tax Returns, GSTR-9, GSTR-9C and other relevant documents for the tax period 2017-18.
6. Post verification, the Audit Officer, respondent No.2 issued an audit observation under Section 65(6) of the Act on 06.06.2023. In the observation, it is stated that Transaction- 1 Credit to the extent of Rs.17,60,334/- wrongly availed and sought interest equal to the amount and with other observations.
7. Thereafter, respondent No.2 proceeded to pass audit report on 11.09.2023 in ADT-02, followed issuance of DRC-01A dated 15.09.2023. Wherein, the intimation of tax ascertainment was an issue under Section 73(5) of the Act for the tax period 2017-18. Thereafter, the petitioner filed his reply on 26.09.2023 explaining in detail the objections to the observations made by respondent No.2 and he has also discharged certain extent of tax components as a Bonafide gestures and to prove the genuineness of the petitioner.
8. Despite the same, respondent No.2 on 30.09.2023 without considering the reply and rather has opted to replicate the portion of tax payments made by the petitioner, but retracted the other points and submissions made by the petitioner. Thereafter, a show cause notice was issued by respondent No.2 on 30.09.2023 in Form No.GST DRC-1 demanding Rs.36,08,684/- and directed the petitioner to deposit the same within 30 days lest the order under Section 73(9) of KGST Act shall be issued after levying penalty equivalent to 10% of tax due or Rs.10,000/- whichever is higher. The reply was submitted to the said show cause notice on 18.10.2023 reiterating the claim of TRANS Credit-01. Thereafter, respondent No.2 without considering the reply submitted on 30.12.2023 passed the order in original dated 31.12.2023, rejecting the contention of the petitioner and demanded a tax amount of Rs.38,63,934/-, including interest and penalty. Aggrieved by the order, the petitioner was before the appellate authority, however, filed it manually instead online, contending that he is not required to deposit 10% statutory deposit in terms of circular dated 10.11.2020. The said appeal came to be dismissed on the ground that the statutory pre-deposit of 10% has not been deposited. Aggrieved by the order passed order in original dated 31.12.2023 and order on the appeal dated 08.12.2025, petitioner is before this Court.
9. Sri Y. Pranay Sharma, learned counsel appearing for the petitioner submits that the authorities have not at all considered the reply submitted. He further submits that, the same authority who has conducted the audit, passed the order which is not sustainable. To buttress his submission, he has relied on the judgment of this Court in W.P.No.104956/2026, disposed on 09.10.2026, wherein, this Court, following the judgment of another Coordinate Bench in W.P.No.103328/2026, allowed the petition and remanded the matter for reconsideration afresh from the stage of submitting a reply to the intimation of tax ascertained under Section 73(5). With further direction to the Joint Commissioner of Commercial Tax to assign the matter to any other person other than respondent No.2 who has passed the impugned order, leaving all the contentions open. The relevant paragraph of the judgment read as under: “2. Heard Sri Girish A. Yadawad, learned counsel for petitioner and Sri Sharad V. Magadum, learned AGA for respondent No.1 and 2/State.
3. Facts in brief to file the present Writ Petition are as under:
3.1. The respondent No.2 on 04.01.2021 issued form GST ADT-01 for the Tax period 2017-18 initiating audit proceedings under Section 65 of the GST Act, 2017. Thereafter, on 11.11.2021, audit report/order under Section 65(6) of the KGST Act, 2017 and CGST Act, 2017 was issued by respondent No.2. Subsequently, respondent No.2 was also issued form GST DRC- 01A(Part-A) an intimation of tax ascertained as payable under Section 73 of the GST Act, 2017 on 05.03.2022. On 20.09.2022, form GST DRC-01 summary of show cause notice was also issued by respondent No.2. Thereafter, respondent No.2 passed a detailed adjudication order on above stated forms on 31.08.2023, which was uploaded on GST portal on 07.09.2023. Thereafter, on 10.01.2024 respondent No.2 initiated recovery proceedings in form GST DRC-13 and also filed a Criminal Miscellaneous No.457 of 2024 before the JMFC Court, Athani on 23.05.2024 seeking recovery of the alleged GST dues pursuant to the impugned order.
4. The main grievance of the petitioner is that in the case she was placed ex-parte without issuing proper notice as contemplated under the provisions.
5. Learned counsel for the petitioner submits that in an identical matter co-ordinate bench of this Court in W.P.No.103328 of 2026 (T-RES) disposed of on 23.04.2026, allowed the writ petition and quashed the impugned order therein and remanded the matter to the concerned authority for fresh consideration from the stage of submitting a reply to the intimation of tax ascertained as being payable under Section 73(5) of the Goods and Services Tax Act, 2017. While remanding the matter, in was further ordered to assign the matter to any person/any proper officer other than respondent No.2, who has passed the impugned order.
6. The relevant paragraph of order passed by the co-ordinate bench in the aforesaid writ petition read as under:
“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.”
7. This position of law is not disputed by learned AGA.
8. Since the dispute involved in this petition is also identical, wherein as per the contention of the petitioner, the adjudicating authority has concluded all the proceedings, which is un-sustainable in law and in view of order passed by the co-ordinate bench stated afore, same benefit afforded to the petitioner in this petition to put forth her case from the stage of show cause notice. Accordingly, this Court proceeds to pass the following:
ORDER
(i) Writ petition is allowed.
(ii) The matter is remanded for reconsideration afresh from the stage of submitting a reply to the stage of intimation of tax ascertained as being payable under Section 73(5) of the Act in form GST DRC-01A dated 05.03.2022.
(iii) The Joint Commissioner of Commercial Taxes (Admn) is directed to assign the matter to any person/proper officer other than the respondent No.2, who passed the impugned order.
(iv) 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 law.”
10. Though in the judgment referred, the petitioner therein was placed exparte, however, in this case, it is the contention of the petitioner that he has actively participated and submitted his reply, but the same were not properly considered, but reiterated that the Audit Officer and adjudicating officer are one and the same, which is not permissible.
11. Both learned HCGP and learned CGC argued in unison in support of the impugned order, submitting that the order came to be passed after considering entire materials, which have been placed on record. It is further submitted that the petitioner has not taken any exception with respect to the very same authority issuing the audit notice, observation and report and show cause notice on the audit report and passing the order in original again, but urged these grounds for first time in this petition and sought for dismissal of the petition.
12. In reply, Sri Y. Pranay Sharma, learned counsel submits that the point under consideration that the same authority cannot be an Audit Officer and the Adjudication Officer is a point of law. Even if it is not urged before the Appellate Authority, same being the point of law can be urged in the Writ Petition.
13. Be that as it may, the main contention is the order came to be passed without properly considering the documents submitted and in view of the Judgment of the Coordinate Bench referred supra in W.P.No.103328/2026, wherein this Court having found that the same Officer, who being the Audit Officer passed the order in original directed the Joint Commissioner to assign the matter/proceedings to any other person other than the person who has passed the impugned order. Therefore, this Court is of the opinion that the matter being identical shall be admitted to the same relief. In view thereof, this Court proceeded to pass the following:
ORDER
(i) Writ Petition is allowed.
(ii) The matter is remanded for consideration afresh from the stage of submitting a reply to the stage of intimation of tax ascertained as being favour under Section 73(5) of the Act in GST DRC-01 dated 30.09.2020.
(iii) The Joint Commissioner of Commercial Taxes is directed to assign the matter to any person/proper officer other than respondent No.2, who passed the order in original/impugned order.
(iv) All contentions of the petitioner are left open subject to deposit of 10% of tax amount demanded before the concerned Officer before whom the matter would be assigned.
