Disposed

Dilip Kumar S v. State of Karnataka

Karnataka HC13 Sept 2022WP/7583/2022

Case brief

AI extract

What is this about?

The High Court of Karnataka disposed of a writ petition challenging audit observations and proposed interest levy under the Karnataka GST Act. The respondent issued a show cause notice with a personal hearing opportunity. The court directed restraint on recovery pending adjudication and reserved liberty for the petitioner to reply to the notice.

What did the court decide?

Petitioner directed to reply to show cause notice within one month; respondents directed not to take coercive recovery steps and to provide personal hearing.

Dilip Kumar S Vs State of Karnataka — Banking and Recovery | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF SEPTEMBER, 2022

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BEFORE

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THE HON’BLE MR. JUSTICE S.R.KRISHNA KUMAR

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WRIT PETITION NO.7583/2022 (T-RES)

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BETWEEN:

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DILIP KUMAR.S S/O SHANKARLAL, AGED ABOUT 57 YEARS, PROPERITOR, M/S VIJAYARAJ DILIPKUMAR, APMC YARD, CHICKMAGALORE-577101.

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... PETITIONER

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(BY SRI.SHIVAYOGI SWAMY, ADVOCATE)

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AND:

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1 . STATE OF KARNATAKA REPRESENTED BY ITS CHIEF SECRETARY, DEPARTMENT OF FINANCE, VIDHANA SOUDHA, BANGALORE-560001.

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2 . THE COMMISSIONER OF COMMERCIAL TAXES IN KARNATAKA COMMERCIAL TAXES BUILDINGS, GANDHINAGAR, BANGALORE-560009.

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3 . THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES LGSTO-250

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SUVARNA KARNATAKA VANIJYA TERIGE BHAVAN, 'A' BLOCK, 12TH CROSS, GOPALA GOWDA EXTENSION, SHIVAMOGGA-577001.

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4 . DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT), MALNAD DIVISION, SUVARNA KARNATAKA VANIJYA TERIGE BHAVAN, A BLOCK, 12TH CROSS GOPALA GOWDA EXTENSION, SHIVAMOGGA-577001.

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5 . THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (E-GOVERNANCE) STATE NODAL OFFICER, COMMERCIAL TAXES BUILDINGS, GANDHINAGAR, BANGALORE-560009.

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THE ASSISTANT COMMISSIIONER OF COMMERCIAL TAXES, LGSTO-250 (COMMERCIAL TAX OFFICER) NEAR ZP, OPP: CHICKKAMAGALUR-577102.

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… RESPONDENTS

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(BY SRI. K.HEMAKUMAR, AGA)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED OBSERVATIONS ISSUED U/S 65(6) OF THE KGST ACT, 2017 DATED 21.02.2022 ISSUED BY THE R4 VIDE ANNEXURE-F AND ETC.,

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THIS WRIT PETITION COMING ON FOR ORDERS , THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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Heard Sri. K.H.Shivayogi Swamy, learned counsel

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appearing for the petitioner and Sri. K.Hemakumar, learned AGA appearing for respondents.

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2. In this petition, the petitioner has sought for

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the following reliefs:

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"(a) Writ of Certiorari or directions in the nature of Certiorari to set aside the impugned Observations issue U/s 65(6) of the KGST Act, 2017 bearing No.DCCT (Audit)/SMG/T:941/2021-22 dated 21.02.2022 issued by the 4th respondent vide Annexure"F".

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(b) DECLARE & HOLD that the 4th respondent has no jurisdiction or authority of law under Section 50 of the KGST Act, to levy interest at the rate of 24% on the wrong posting of excess transitional input tax credit in the petitioner's GST portal due to departmental GST portal technical glitch, which is not attributable to the petitioner and to set aside the proposed levy of interest u/s 50 of the GST Act as per impugned Notice bearing No.DCCT (Audit)/SMG/T:941/2021-22 dt.21.02.2022 issued by the 4th respondent vide Annexure "F".

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(C) Issue each other writ or orders as deemed fit in the circumstances of the case in the interest of justice and equity.

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(d) Issue writ of Certiorari or directions in the nature of Certiorari to quash the impugned Audit Report passed by the 4th respondent u/s 65(6) of the KGST Act, 2017 in Form GST ADT02 bearing No.T.No.50/2022-23 Ref.No.11765 dated 25.04.2022 vide Annexure "G".

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(e) Issue writ of Certiorari or directions in the nature of Certiorari to quash the impugned Notice bearing No.ACCT:LGSTO250/CKM/ASMT-10/T.12/2022-23 dated 04.04.2022 issued by the Asst.Commissioner of Commercial Taxes, LGSTO-250, chickmagalore, proposed 6th respondent vie Annexure "J"."

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In addition to reiterating the various

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contentions urged in the petition and referring to the material on record, the material on record discloses that in the first instance, an intimation of audit observation dated 21.02.2022 was issued by respondent No.4, which was challenged by the petitioner before this Court. However, since there was no interim order passed by this Court in the present petition, respondent No.4 has proceeded to prepare an audit report to which a show cause notice dated 26.08.2022 has been issued to the petitioner. It is the grievance of the petitioner that since, there is no interim order passed in the present petition, the respondents are attempting to proceed further and initiate recovery proceedings against the petitioner who is before this Court by way of present petition.

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Per Contra, learned AGA appearing for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

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A perusal of the show cause notice dated 26.08.2022 issued by the respondents under Section 73(1) of the GST Act read with rule 142 of GST Rules, 2017 will clearly indicate that the petitioner has been merely called upon to show cause as to why the amounts, penalty, interest etc., has detailed in the audit report should not be levied upon him. The said show cause notice also provides an opportunity for personal hearing to the petitioner and who also be entitled to produce pleadings and documents in support of his claim along with the reply to the show cause notice. Under these circumstances in view of aforesaid subsequent events that has transpired during the pendency of the petition i.e., show cause notice dated 26.08.2022 issued by the respondents to the petitioner, without expressing any opinion on the merits/de-merits of the rival contentions, I deem it just and appropriate to dispose off this petition reserving liberty in favour of the petitioner to submit his reply/response to the aforesaid

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show cause notice dated 26.08.2022, along with all relevant documents within a period of one month from today. Upon receipt of the said reply/response along with the relevant documents by the petitioner, the concerned respondents shall provide an opportunity of personal hearing to the petitioner and proceed further to pass appropriate speaking orders in accordance with law.

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It is further directed that till the concerned respondent considers the reply/response of the petitioner and passes appropriate speaking orders after providing an opportunity for personal hearing in favour of the petitioner, the respondent shall not take any coercive/precipitate steps against the petitioner for recovery of any amount from the petitioner. Subject to the aforesaid directions the petition stands disposed off.

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In view of disposal of main matter, I.A.No.3/2022 and I.A.No.5/2022 do not survive for consideration and stand disposed off.

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Sd/-

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JUDGE

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Dilip Kumar S v. State of Karnataka

Case brief

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Dilip Kumar S v. State of Karnataka

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