Basanagowda vs. Union Of INDIA And Ors - Karnataka High Court, 02 December 2025

Cause title — parties, addresses and appearances

- 1 - HC-KAR NC: 2025:KHC-K:7413 WP No. 202583 of 2024 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 2ND DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.G.S.KAMAL WRIT PETITION NO. 202583 OF 2024 (T-RES) BETWEEN: SRI BASANAGOWDA PROPRIETOR, AT POST HARANAGERA, UKKINAKAL, TQ. SHAHAPUR, DIST.YADGIRI-585201, (REPRESENTED BY ITS PROPRIETOR, SHRI BASANAGOWDA S/O AYYANAGOUDA, AGED ABOUT 50 YEARS). …PETITIONER (BY SRI PRAKASH D, ADVOCATE) AND: 1. UNION OF INDIA, MINISTRY OF FINANCE NORTH BLOCK, NEW DELHI-110001. 2. GST COUNCIL, OFFICE OF THE GST COUNCIL SECRETARIAT, 5TH FLOOR, TOWER-II, JEEVAN BHARTI BUILDING, JANPATH ROAD, CONNAUGHT PLACE, NEW DELHI-110001. 3. STATE OF KARNATAKA, REPRESENTED BY ITS SECRETARY, Digitally signed by SHIVALEELA DATTATRAYA UDAGI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC-K:7413 WP No. 202583 of 2024 VIDHANA SOUDHA, BENGALURU-560001. 4. THE COMMERCIAL TAX OFFICER (AUDIT), OFFICE OF THE COMMERCIAL TAX OFFICER (AUDIT), CHITTAPUR ROAD, OPP. HP GAS GODOWN, YADGIRI-585202. 5. THE COMMERCIAL TAX OFFICER (AUDIT-1), ROOM NO. 15, 2ND FLOOR, V.T.K. BUILDING, NEAR RAILWAY STATION, KALABURAGI-585316. 6. THE MANAGER, KARNATAKA BANK LIMITED, NO. 1-891/77/4, SAI NAGAR RING ROAD, RAM MANDIR CIRCLE, KALABURAGI-585102. …RESPONDENTS (BY SRI SUDHIR SINGH R. VIJAPUR, DSGI FOR R1 AND R2; SRI MALHAR RAO AAG AND SRI SHESHADRI JAISHANKAR M., AGA FOR R3 TO R5; R6 SERVED) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO (A) ISSUE A WRIT OF CERTIORARI, OR SUCH OTHER WRIT, ORDER OR DIRECTION AS THIS COURT MAY DEEM FIT AND QUASH THE IMPUGNED ORDER PASSED BY RESPONDENT NO.4 IN FORM GST DRC-07 NO.CTO/AUDIT/YDG/2023-24 DATED 20.11.2023 FOR THE FINANCIAL YEAR 2017-18 WHICH IS HEREWITH ENCLOSED AS ANNEXURE- A AND CONSEQUENTIAL DEMAND ORDER ISSUED GST DRC-07 VIDE REFERENCE NO ZD291123028451P DATED 20.11.2023 WHICH IS HEREWITH ENCLOSED AS ANNEXURE-A-1; (B) ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT AS THIS COURT DEEMS FIT TO QUASH THE ORDER IN FORM GST DRC- 07 IN FILE NO.CTO/AUDIT-1/KLB/ASSIGN NO.628/2023-24 - 3 - HC-KAR NC: 2025:KHC-K:7413 WP No. 202583 of 2024 DATED 30.01.2024 FOR FINANCIAL YEAR 2018-19 WHICH IS HEREWITH ENCLOSED AS ANNEXURE-D; (C) ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT AS THIS COURT DEEMS FIT TO QUASH THE GARNISHEE ORDER ISSUED BY RESPONDENT NO.4 FORM GST DRC-22 ISSUED BY COMMERCIAL TAX OFFICER (AUDIT) UNDER SECTION 83 OF KGST ACT, 2017 IN REFERENCE NO.1641 DATED 23.02.2024 WHICH IS HEREWITH ENCLOSED AS ANNEXURE-G; (D) PASS SUCH OTHER ORDER, DIRECTION OR WRIT AS THIS COURT MAY DEEM FIT AND APPROPRIATE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.G.S.KAMAL

ORAL ORDER (PER: HON'BLE MR. JUSTICE M.G.S.KAMAL) A short grievance of the petitioner is that the Assessing Authority in its order dated 20.11.2023 passed under Section 73 (9) of the KGST/CGST Act, 2017 for the period from April, 2017 to March, 2018 as well as the summary order passed under Section 73 (1) read with Section 122 (2) (a) and Section 50 of the CGST/SGST Act, 2017 for the financial year April, 2018 to March, 2019, has called upon the petitioner to pay an aggregate sum of HC-KAR NC: 2025:KHC-K:7413 Rs.3,78,34,369/- and Rs.2,12,89,681/- together with penalty and interest thereon respectively.

Learned counsel for the petitioner, taking this Court through the records, submits that the passing of the said order was without any opportunity to the petitioner of being heard. In other words, the said order was passed ex-parte. That the period of assessment made by the Assessing Officer fell both within the Karnataka Value Added Tax as well as the GST regimes. It is submitted that the petitioner is called upon to pay for a particular financial year under both the regimes. The same would amount to double taxation, which is impermissible. That the petitioner could not canvass this aspect of the matter before the Assessing Officer as he had no opportunity.

Secondly, he submits that the assessment order also includes payment of GST and royalty which question is still pending consideration before the Apex Court. Therefore, he submits that an opportunity be provided to the petitioner to present his case before the Assessing HC-KAR NC: 2025:KHC-K:7413 Authority on the first aspect of the matter i.e., permissibility of imposition of tax on both the regimes. He relies upon the order passed by the Co-ordinate Bench of this Court dated 27.06.2023 passed in W.P.No.200947/2019 and connected matters in the case opportunity by means of issuance of show-cause notice, personal calls. Yet the petitioner remained deliberately non-responsive. The petitioner therefore is not entitled for any more opportunity. He insists that there is an alternate remedy of filing an appeal and the petitioner if so advised shall pay the statutory deposit and seek remedy of appeal. Hence, seeks for dismissal of the petition.

In response, learned counsel for the petitioner submits that should there be any delay, petitioner is in any HC-KAR NC: 2025:KHC-K:7413 way liable to pay the interest and therefore the State would not be deprived of any income. Since the petitioner is raising the legal question, he be provided with an opportunity.

Heard. Perused the records.

Perusal of the impugned orders referred to above produced at Annexures-A and D would indicate that the Assessing Officer has taken into consideration the undeclared turnover at the time of audit scrutiny for the financial year 2017-2018 as well as 2018-2019 referred to above and has purportedly noticed gross contract receipt during the progress of the work as noted in the impugned orders. The Assessing Officer seems to have taken the aggregate of the turnover for the said period. As rightly pointed out by learned counsel for the petitioner, though the said order do not specify as to which part of the turnover falls within the KVAT regime and which part falls within the GST regime, the said factual and legal aspect of the matter needs to be gone into. HC-KAR NC: 2025:KHC-K:7413

Therefore, there is considerable force in the submission made by the learned counsel for the petitioner as the issue raised by the petitioner is both factual and legal, that requires to be addressed by the original authority, namely the respondent Nos.4 and 5 with respect to order at Annexure-D.

As regards the apprehension of further delay in the matter expressed by learned AAG, it is to be noticed that if it is found that the petitioner is liable to pay the tax as claimed, any delay thereafter would invariably involve payment of interest thereon and therefore the interest of the State exchequer is also taken care of.

10.

In that view of matter, the petition is allowed. Order dated 20.11.2023 at Annexure-A passed by respondent No.4 as well as order dated 30.01.2024 at Annexure-D passed by respondent No.5 are hereby quashed. Respondent No.4 shall furnish copy of the show- cause notice as regards the order dated 23.08.2023 to the petitioner pertaining to the order at Annexure-A. The HC-KAR NC: 2025:KHC-K:7413 petitioner shall take the show-cause notice at Annexure-C with regard to order at Annexure-D. The petitioner shall furnish reply/submission along with the necessary documents, if any, to respondent Nos.4 and 5 respectively within 30 days from the date of receipt of certified copy of this order. The respondent Nos.4 and 5, after affording sufficient opportunity to the petitioner, pass appropriate order within 60 days thereafter in accordance with law. (M.G.S.KAMAL) JUDGE

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