Facts of the Case

The petitioner, M/s Gurumallappa and Company, a registered partnership firm at Ballari, challenged two orders passed under sub-section (9) of Section 73 of the CGST/KGST Act, 2017 along with their consequential summaries in FORM GST DRC-07: one dated 19.04.2024 for tax period 2018-19, and another dated 13.08.2024 for tax period 2019-20, both issued by Deputy Commissioners of Commercial Taxes, Audit-1 and Audit-2, Ballari. The petitioner filed a writ petition before the Dharwad Bench of the Karnataka High Court under Article 226 seeking to quash both orders, without having first exhausted the statutory appellate remedy available under the CGST/KGST Act.

Issues Involved

  1. Whether a writ petition challenging Section 73(9) demand orders is maintainable when an efficacious alternative remedy of statutory appeal under Section 107 is available.
  2. Whether the Court should entertain the writ on merits or relegate the petitioner to the appellate forum.

Petitioner's Arguments

  • The petitioner sought to have both DRC-07 orders for tax periods 2018-19 and 2019-20 quashed directly by the High Court under its writ jurisdiction, citing them as illegal and unsustainable.
  • No specific ground of want of jurisdiction, violation of natural justice, or breach of fundamental rights was pressed to justify bypassing the statutory appellate remedy.

Respondent's Arguments

  • The learned Additional Government Advocate accepted notice for the respondents and pointed out that the impugned orders were appealable under Section 107 of the CGST/KGST Act, and the petitioner had not availed that alternative remedy.

Court Order / Findings

  • The Court noted that what was under challenge was an order passed under sub-section (9) of Section 73 of the CGST/KGST Act, against which the petitioner had an alternative and efficacious remedy of appeal under Section 107.
  • Where a statutory appellate remedy under Section 107 is available against a Section 73(9) demand order, the High Court will ordinarily decline to exercise writ jurisdiction and relegate the assessee to that remedy.
  • Reserving liberty to the petitioner to pursue the statutory appeal, the writ petition was disposed of, and pending interlocutory applications were dismissed.

Important Clarification

  • Writ courts consistently decline to substitute themselves for the statutory appellate mechanism under Section 107 of the CGST Act unless exceptional grounds such as lack of jurisdiction or gross violation of natural justice are made out.
  • Taxpayers aggrieved by a Section 73(9) order should ordinarily pursue the appellate remedy, including compliance with the mandatory pre-deposit, rather than approach the High Court directly.
  • Disposal 'with liberty' rather than outright dismissal preserves the assessee's right to challenge the order on merits before the appropriate forum.

Sections Involved

  • Section 73(9), CGST/KGST Act, 2017 – provides for determination and demand of tax, interest and penalty after adjudication of a show cause notice.
  • Section 107, CGST/KGST Act, 2017 – prescribes the statutory appellate remedy against orders passed by adjudicating authorities.

Decision – In Favour of

The decision does not turn on merits and is neither a clear win for the assessee nor the Department; the writ petition was disposed of with liberty to the petitioner to pursue the statutory appeal remedy under Section 107.

Case Details

High Court of Karnataka, Dharwad Bench; Writ Petition No. 105417 of 2025 (T-RES); M/s Gurumallappa and Company vs Deputy Commissioner of Commercial Taxes, Audit 1 and Audit 2, Ballari; Coram: Justice Suraj Govindaraj; Decided on 05.08.2025.

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