Karnataka HC Orders Expeditious Disposal of GST Appeals on ₹2.3 Crore Demand Amid Allegations of Coercion & Threat by Officials [Read Order]
The Karnataka High Court observed that the appeals required a time-bound decision due to the extensive time it had been pending and the allegations pertaining to coercive recovery
GST Appeal
GST Appeal
The Dharwad Bench of the Karnataka High Court recently directed the Joint Commissioner of Commercial Taxes (Appeals), Belagavi to expedite adjudication in two Goods and Services Tax Appeals concerning a penalty demand and interest amounting to ₹2,33,91,504 amid allegations that the Petitioner was subject to threat and coercion by the authorities to effectuate recovery.
The Petitioner, Hukkeri Taluka Samagra Grameen Abhivraddi Sangh (Hukkeri Taluka), a GST-registered manpower service provider who affiliates with Governmental departments was the subject of a Manual Intelligence Report dated January 20, 2024, issued by the concerned The Commercial Tax Officer alleging a discrepancy of ₹36,00,000 between GSTR-3B and GSTR-7 in the petitioner’s returns.
On the same day, invoking powers under Section 67(1) of the Central GST Act, the Joint Commissioner Of Commercial Taxes (Enforcement) issued an authorization in Form GST INS-01 dated 20.01.2024 to conduct inspection of the petitioner’s business premises, but failed to mention the complete address of the property in the relevant column.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The petitioner contended that the authorities conducted inspection and search on his premises unauthorizedly. It was stated that the petitioner was subject to threats of arrest and intimidation to effectuate recovery of penalty and interest aggregating ₹2,33,91,504 - which was recovered coercively without any statutory notice, followed only a belated pre-SCN intimation under Section 74(5) for FY 2017-18.
The petitioner further submitted that he had preferred an appeal under Section 107(1) of the GST Act before the appellate authority, which is pending adjudication and that the same was not being conducted in an expeditious manner
The petitioner, represented by Ganesh Vishwnath Shandage sought a mandamus for expeditious disposal of its statutory appeals and separately claimed refund of ₹53,97,352 with interest which was said to have been recovered under duress.
Hukkeri Taluka’s counsel relied upon the decisions of the Supreme Court in Dabur India Ltd. v. State of U.P. (1990) and Radhika Agarwal v. Union of India (2025); and the decisions of the Karnataka High Court in Intelligence Officer,Directorate General of GST Intelligence, Bengaluru vs. Kesar Color ChemIndustries (2025) and Union of India vs. Bundi Technologies (P.) Ltd. (2022).
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Sharad V. Magadum and Venkatesh M. Kharvi appearing for the respondents refuted all the claims of coercion and threat raised by the petitioner,, submitting that the matter is already before the appellate authority and should be decided on merits
The single-judge Bench of Justice Pradeep Singh Yerur recorded that the appeals were filed on February 13, 2025 and that no notice had yet been issued as of July 2025. The bench observed that, given the pendency of the statutory appeals and the allegations pertaining to recovery, the issue requires a time-bound decision by the appellate forum.
Accordingly, the Court allowed the petition and issued a writ of mandamus directing the 5th respondent (Joint Commissioner of Commercial Taxes-Appeals, Belagavi) to consider and dispose of the petitioner’s appeals expeditiously, taking into account the decisions cited by petitioner’s counsel.
The Court mandated issuance of notice within two weeks from receipt of the order and disposal within six weeks thereafter, while clarifying that it has not passed any opinion on the merits of the matter.
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