Case Reference:
Shiva Enterprises v. State of Karnataka [2025] 173 taxmann.com 484 (Karnataka)[24-03-2025]

1. Background:

The case concerns the issuance of two identical Goods and Services Tax (GST) demand orders under Section 73(9) of the Karnataka Goods and Services Tax (KGST) Act, 2017, by two different tax authorities for the same tax period (FY 2019-20) and the same subject matter against Shiva Enterprises.

2. Key Issues and Facts:

Duplicate Orders: The core issue is that two separate Commercial Tax Officers (one from Ramanagara and another from Channapatna) initiated proceedings and passed similar demand orders under Section 73(9) of the KGST Act against Shiva Enterprises for the financial year 2019-2020 concerning the same subject matter.

Petitioner's Contention: Shiva Enterprises argued that the existence of these two identical orders from different authorities for the same matter and period was legally unsustainable. They sought the quashing of both orders and the remittance of the matter to one authority (the Commercial Tax Officer, Ramanagara) for fresh assessment, with the opportunity to avail the benefits of the Amnesty Scheme under Section 128A of the KGST Act.

Government Pleader's Submission: The learned High Court Government Pleader argued that the petition lacked merit and should be dismissed.

High Court's Observation: Justice S.R. Krishna Kumar of the Karnataka High Court noted that: "in relation to very same tax period 2019-2020 and the same subject matter in respect of the very same petitioner, both 4th respondent - The Commercial Tax Officer, Ramanagara as well as the 5th respondent - the Commercial Tax Officer(Audit),Channapatna have passed similar orders, under identical circumstances against the very same petitioner under Section 73(9) of the KGST Act, which is impermissible in law."

Amnesty Scheme Intent: The court also acknowledged the petitioner's intention to avail the benefits of the Amnesty Scheme under Section 128A of the KGST Act.

3. High Court's Decision and Rationale:

The High Court ruled in favour of the assessee, Shiva Enterprises, and passed the following order:

Orders Set Aside: Both impugned orders (Annexure-A dated 27.06.2024 and Annexure-B dated 31.08.2024) passed by the two different Commercial Tax Officers were quashed.

Matter Remitted: The case was remitted back to the Commercial Tax Officer, Ramanagara, for reconsideration afresh in accordance with the law.

Petitioner's Appearance: Shiva Enterprises was directed to appear before the Ramanagara authority on 26th March 2025.

Reassessment Timeline: The Ramanagara authority was instructed to reconsider the matter and pass appropriate orders on or before 28th March 2025.

Liberty to Apply for Amnesty: The petitioner was granted the liberty to make necessary applications to avail the benefits of the Amnesty Scheme under Section 128A of the KGST Act.

Amnesty Scheme Implementation: The 3rd respondent (not explicitly identified but likely a higher tax authority) was directed to grant the benefit of the Amnesty Scheme to the petitioner under Section 73(9) of the KGST Act immediately after the Ramanagara authority passes its fresh order.

The core rationale for the High Court's decision was the fundamental impermissibility in law of two different authorities passing identical orders under Section 73(9) of the KGST Act for the same tax period and subject matter against the same assessee. The court explicitly stated: "This is totally impermissible in law".

4. Implications and Key Takeaways:

Prohibition of Duplicate Adjudication: This judgment reinforces the principle that multiple tax authorities cannot simultaneously and identically adjudicate the same GST matter for the same taxpayer and period. Such a practice is deemed legally invalid.Importance of

Coordination within Tax Authorities: The case highlights the need for better coordination and communication between different wings or jurisdictions of the GST department to avoid such duplication of proceedings.

Remedial Action for Assessees: Taxpayers facing similar situations where multiple identical orders have been issued may find recourse in this judgment to have the duplicate orders set aside.

Opportunity for Amnesty Scheme: The High Court specifically facilitated the petitioner's access to the Amnesty Scheme, indicating a willingness to allow taxpayers to benefit from such schemes during reassessment following procedural errors.

Procedural Fairness: The judgment underscores the importance of procedural fairness and the avoidance of redundant or conflicting actions by tax authorities.