State Of Karnataka vs. H K Geetha

Heard learned Additional Government Advocate Sri Aditya Vikram Bhat for the appellants and learned counsel Sri Joseph Varghese for respondent No.

Respondent No.1 had approached the learned Single Judge with following prayers: "a) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside the Show Cause Notice issued by the Respondent no. 1 dated 21-10-2023 (ANNEXURE A1); b) To issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Impugned Order dated 03-01-2024 passed by Respondent no. 1 under section 74 of the GST Act, 2017 (ANNEXURE B); c) Consequently, to issue a writ of Certiorari or order or direction in the nature of Certiorari to set aside and quash the Impugned summary issued in Form GST DRC-07 dated 03-01-2024 ('ANNEXURE B1'). d) Alternatively, in the event the demand under section 73 of the GST Act, 2017, order dated 03-01-2024 (ANNEXURE - B) is not set aside in toto /or revives due to operation of law, then, issue a writ of Mandamus order or direction in the nature of Mandamus directing the Respondent no. 2, 3, 4, 5, 6 and 7 to enter into a Supplementary Tender HC-KAR NC: 2026:KHC:33062-DB Agreement, or any other permissible arrangement revise the rate of applicable taxes and pay the differential GST liability imposed on the Petitioner, to the tune of Rs.11,10,302/- (CGST and KGAT component) and also pay the Petitioner interest at the applicable rates and penalty to the tune of Rs.10,93,824/-(CGST and KGST component); and issue a writ of Mandamus order or direction in the nature of Mandamus directing the Respondent No. 1 to verify the invoices available with the Petitioner and the Form GSTR2A which is a statutory record available with Respondent No. 1; and e) Grant any other orders that this Hon'ble Court deems fit and proper in the interest of justice."

The learned Single Judge, as stated above, placing reliance on the decision of Sri Chandrashekaraiah cited supra, disposed of the writ petition directing the writ petitioner to submit the representation and also directing the concerned respondents including the appellants to consider the said representation and proceed in accordance with law as laid down in Chandrashekaraiah cited supra.

It is brought to the notice of this Court that the Co-ordinate Bench of this Court in W.A.No.1587/2023 and connected appeals disposed of on 10.06.2026, wherein order HC-KAR NC: 2026:KHC:33062-DB was challenged insofar as directions issued to the Tax Authorities, referring to Chandrashekaraiah's case supra has held as follows at paragraph Nos.7 to 10:

The learned counsel appearing for the appellants has confined the challenge to the impugned order to the directions issued to the tax authorities. It is submitted that the operative part of the impugned order - insofar as it permits the writ petitioners to file returns / amended returns for the period after 01.07.2017 by calculating the differential tax in the manner set out therein, waives the interest, penalty and the period of limitation under the GST Acts, and directed the GST authorities not to take precipitative action against the writ petitioners is contrary to the statutory scheme. It is submitted that the levy of interest under Section 50 of the Central Goods and Services Tax Act, 2017 is automatic and mandatory and admits of no discretion to waive or reduce it, and that there is no provision enabling the filing or amendment of returns in the manner directed.

The dispute as to whether the writ petitioners would be entitled to reimbursement of the incremental tax paid or payable by them on account of the levy of GST is strictly a matter between the writ petitioners and the Employers with whom they had entered into the contracts. The contracts between the writ petitioners and the Employers would not alter the statutory scheme for the levy of GST. Thus, the liability of the writ petitioners to pay Goods and Services Tax (whether under the Central Goods and Services Tax Act, 2017, the State Goods and Services Tax Act, 2017 or the Integrated Goods and Services Tax Act, 2017) is required to be determined strictly in accordance with the provisions of the relevant HC-KAR NC: 2026:KHC:33062-DB statute. The question of the levy of GST, assessment, recovery, and enforcement is a matter of statutory prescription.

In view of the above, no directions could be issued permitting the filing of any revised returns contrary to the provisions of the statute. The plenary directions to waive the penalty, interest under the GST Acts or the limitation for filing returns/revised returns are also unsustainable.

The controversy as to the incremental tax burden arising on account of the change in the tax regime is, in essence, one between the writ petitioners and the Employers. In the context of such a dispute, no directions could be issued to the tax authorities regarding the levy, assessment, and collection of tax, penalty, or interest."

Respectfully accepting the above decision, we are of the view that the learned Single Judge's order requires to be set-aside.

However, learned counsel for the respondent points out that the writ petitioner before the learned Single Judge had raised other contentions, which are not dealt by the learned Single Judge. He invites attention of this Court to grounds raised in the writ petition and submits that the contentions with regard to invalidity of unsigned impugned order, non issuance of mandatory personal hearing; and denial of input tax credit HC-KAR NC: 2026:KHC:33062-DB was raised. On perusal of the impugned order, it is seen that the other contentions raised by the writ petitioner before the learned Single Judge were not considered and the writ petition was disposed of solely on the basis of Chandrashekaraiah case supra.

In view of the above, the order dated 14.03.2025 in W.P.No.35559/2024 passed by the learned Single Judge is set-aside. The writ petition is remitted back to the learned Single Judge to consider other contentions raised by the writ petitioner.