Facts of the Case

The petitioner, M/s Paliath Interiors Private Limited, represented by its Director Shri Puthezath Narendran, challenged an Order-in-Original No.04/GST/2023-24 dated 21.07.2023 passed by the Commissioner of Central Tax, Bengaluru North Commissionerate (respondent No.1). The petitioner also sought the records relating to an Office Order No.103/2023 dated 06.07.2023 issued by the Central Board of Indirect Taxes and Customs (CBIC), respondent No.2, and any other directions issued to officers who were promoted to the rank of Commissioner to discharge functions under Sections 73 and 74 of the CGST Act, 2017. The core grievance was that the show-cause notice culminating in the impugned order under Sections 73/74 of the CGST Act had been issued and adjudicated by an officer who was not validly clothed with jurisdiction to do so, the promotion/authorisation of such officers to exercise Commissioner-level powers being under challenge. The petitioner approached the Karnataka High Court under Articles 226 and 227 of the Constitution seeking to quash the impugned order on this jurisdictional ground.

Issues Involved

  1. Whether the show-cause notice and the consequential Order-in-Original passed under Sections 73/74 of the CGST Act, 2017 by an officer whose authorisation/promotion to Commissioner rank was under challenge, could be sustained.
  2. Whether the grounds raised were identical to those already considered and decided by the Court in an earlier batch of writ petitions.

Petitioner's Arguments

  • The impugned Order-in-Original was passed by an officer acting outside the scope of valid jurisdictional authorisation to exercise powers under Sections 73/74 of the CGST Act, 2017.
  • The grounds urged were identical to those already considered by the Court in W.P.No.28182/2024 and connected matters, and the same relief ought to follow.
  • The Office Order No.103/2023 and related directions issued by CBIC promoting officers to the rank of Commissioner for discharging Section 73/74 functions required scrutiny, and the impugned order founded thereon was liable to be quashed.

Respondent's Arguments

  • Learned counsel for the respondents contested the petition, though the Court noted that the grounds raised were identical to those already dealt with in the earlier batch of writ petitions decided on the same day.
  • The Department's position was, in substance, that the officer concerned was validly authorised and the proceedings under Sections 73/74 were properly initiated and adjudicated.

Court Order / Findings

  • The Court held that the grounds projected in the present petition were identical to those considered in W.P.No.28182/2024 and connected matters, disposed of on the same date, i.e., 28.08.2025.
  • Applying the same reasoning, the Court held that the impugned show-cause notice issued by the jurisdictional Assessing Officer, acting outside the scope of valid authorisation, stood obliterated, and all further proceedings initiated pursuant thereto and challenged in the petition stood quashed.
  • The petition was allowed on this limited jurisdictional ground.

Important Clarification

  • Liberty was expressly reserved to the Revenue to revive the petition in the event the Supreme Court, in the matter pending before it on the underlying jurisdictional question, were to rule in favour of the Revenue.
  • All other contentions of both parties, except the jurisdictional point specifically addressed, were kept open to be considered afresh in the event of revival of the petition.
  • This order illustrates a recurring pattern where High Courts quash GST proceedings founded on an unresolved dispute over the valid conferment of adjudicating powers on officers, while safeguarding revenue interests by permitting revival depending on the outcome of the pending Supreme Court litigation.
  • The ruling does not finally settle the merits of the underlying tax demand; it only addresses the threshold question of the adjudicating officer's jurisdiction.

Sections Involved

  • Section 73 of the CGST Act, 2017 – determination of tax not paid/short paid without fraud, wilful misstatement or suppression.
  • Section 74 of the CGST Act, 2017 – determination of tax not paid/short paid involving fraud, wilful misstatement or suppression.
  • Articles 226 and 227 of the Constitution of India – writ jurisdiction invoked to challenge the order and the underlying authorisation.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee, with the impugned show-cause notice and consequential proceedings quashed on the ground of the adjudicating officer's questioned jurisdiction, subject to liberty granted to the Department to revive the proceedings depending on the outcome of the pending Supreme Court matter.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 23790 of 2023 (T-RES)
Coram: Hon'ble Mr. Justice M. Nagaprasanna
Date of Order: 28th August, 2025

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