M/S. Saibini Inorganic vs. Commercial Tax Officer (Audit) 1.6
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The petitioner, M/s. Saibini Inorganic, a registered partnership firm, filed a writ petition before the High Court of Karnataka challenging a Show Cause Notice (SCN) issued by the Commercial Tax Officer (Audit) 1.6, DGSTO-1, Bengaluru. The SCN, dated January 7, 2025, was issued under Section 74(1) of the KGST Act, 2017. The petitioner's primary grievance was that the respondent had initiated fresh proceedings under Section 74 for the same issue and facts for which proceedings had already been initiated and an adjudication order passed under Section 73 of the KGST Act on April 30, 2024, by a different officer. The petitioner contended that initiating parallel proceedings for the same matter was impermissible. The respondent, represented by the Additional Government Advocate (AGA), argued that the proceedings were initiated by a different officer and suggested the petitioner submit a reply to the SCN, bringing the prior proceedings to the respondent's notice.
Held
The Court disposed of the writ petition by directing the petitioner to submit a reply to the Show Cause Notice dated January 7, 2025, along with relevant documents, including the earlier proceedings and the adjudication order dated April 30, 2024. This reply was to be submitted to the respondent within four weeks. The Court further directed that upon receiving the reply and documents, the respondent should consider them and proceed further in accordance with the law, bearing in mind the earlier proceedings and order. Crucially, the Court ordered that until the respondent passes appropriate orders, no precipitative or coercive steps would be taken against the petitioner pursuant to the impugned Show Cause Notice. The Court did not explicitly decide on the legal permissibility of parallel proceedings but provided a procedural path to address the petitioner's grievance.
Key Issues
1. Whether the initiation of fresh proceedings under Section 74(1) of the KGST Act, 2017, by the respondent is legally permissible when prior proceedings concerning the same issue and facts were already initiated and an adjudication order passed under Section 73 of the KGST Act, 2017, by a different authority? Petitioner's Contention: The petitioner argued that initiating fresh proceedings under Section 74 for the same matter, for which an adjudication order under Section 73 had already been passed, is impermissible in law. They relied on the principle that parallel proceedings for the same cause of action are not allowed. Respondent's Contention: The respondent submitted that the current proceedings were initiated by a different officer than the one who passed the prior adjudication order. They did not explicitly argue against the petitioner's contention regarding the impermissibility of parallel proceedings but rather suggested that the petitioner should file a reply to the SCN, informing the respondent of the earlier proceedings.
Sections Cited
Section 74(1), Section 73, Section 73(9)
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Cause title — parties, addresses and appearances
ORAL ORDER In this petition, petitioner seeks the following reliefs: “i. Issue a writ of certiorari or any other Writ or Order or direction of appropriate nature to call for the records of the case and after scrutinizing the same, to strike down and quash the Show Cause Notice issued by the Respondent in Form GST DRC 01 vide Reference No.ZD2901250217696 under section 74(1) of the KGST Act, 2017 vide No. CTO(Audit) 1.6/GST(A)/T.No.624/2024-25 dated 07.01.2025 vide Annexure-A. ii. Pass any other order or orders as this Hon’ble Court deems fit and proper in the facts and circumstances of the present case.”
Heard learned counsel for the petitioner and learned AGA for the respondent and perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the proceedings initiated by the respondent under Section 73 of the KGST Act in order to point out that an adjudication order under Section 73(9) NC: 2025:KHC:11845 has been passed by the Commercial Tax Officer (Audit)-1.2, DGSTO-1, Bengaluru on 30.04.2024 under which, the said officer thereto has proceeded as against the petitioner. It is the grievance of the petitioner that subsequent to initiating the proceedings by the officer as against the petitioner under Section 73 of the KGST Act, the respondent herein has initiated fresh proceedings under Section 74 in relation to the very same issue and facts and circumstances, which is impermissible in law and as such, the petitioner is before this Court by way of the present petition.
Per contra, learned AGA for the respondent submits that the aforesaid proceedings is initiated by the officer, who is different from the respondent herein and as such, the present petition may be disposed of reserving liberty in favour of the petitioner to submit a reply to the Show Cause Notice by bringing to the notice of the respondent herein about the proceedings so as to enable the respondent to proceed further, in accordance with law.
In view of the aforesaid facts and circumstances and the undisputed fact that the petitioner so far has not submitted any reply to the Show Cause Notice dated 07.01.2025 issued by the respondent, I deem it just and appropriate to dispose of this petition NC: 2025:KHC:11845 by directing the petitioner to submit a reply to the Show Cause Notice along with relevant documents including earlier proceedings and the order dated 30.04.2024 passed by the Commercial Tax Officer (Audit)-1.2, DGSTO-1, Bengaluru, to the notice of the respondent within a period of four weeks from today. If petitioner submits such a reply / documents, etc, before the respondent herein, the respondent herein shall consider the same and proceed further in accordance with law bearing in mind earlier proceedings by Commercial Tax Officer (Audit)-1.2, DGSTO-1, Bengaluru as well as the earlier order dated 30.04.2024. It is made clear that till the respondent herein passes / takes appropriate orders as stated supra, the respondent or any of the authority shall not take precipitative / coercive steps against the petitioner pursuant to the impugned Show Cause Notice.
Subject to the aforesaid directions, the petition stands disposed of. (S.R.KRISHNA KUMAR) JUDGE
SV List No.: 1 Sl No.: 80
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.