Issues: Whether the payments made through Form GST DRC-03 during and following inspection qualified as voluntary payments based on self-ascertainment under the GST law, and whether their refund was liable to be granted.

Analysis: A payment under Section 74(5) must be founded on ascertainment of tax liability and include the requisite interest and penalty. Rule 142(2) requires issuance of an acknowledgement in Form GST DRC-04 for a voluntary DRC-03 payment. No prior demand, assessment, quantification, or material establishing self-ascertainment was shown. The DRC-03 payments recorded nil interest and penalty, no DRC-04 acknowledgement was issued, and one payment followed an unsupported direction for personal appearance. The statutory framework and departmental instructions do not permit recovery during inspection or investigation without following the prescribed process.

Conclusion: The payments were not voluntary self-ascertained payments, and rejection of the refund applications was erroneous; the assessee was entitled to refund of Rs.53,97,352 with interest at 6% per annum from the dates of payment until refund.

Issues: Whether an appellate authority may dismiss a GST appeal for non-prosecution owing to the appellant's absence, instead of deciding it on merits.

Analysis: Section 107(11) of the Central Goods and Services Tax Act, 2017 requires the Appellate Authority to make such inquiry as necessary and pass a just and proper order confirming, modifying or annulling the order appealed against. Section 107(12) further requires a written appellate order stating the points for determination, the decision and reasons. These provisions require adjudication on merits and do not permit dismissal merely for the appellant's non-appearance. The impugned order neither adjudicated the appeal on merits nor contained reasons.

Conclusion: The Appellate Authority could not dismiss the appeal for non-prosecution; the issue is decided in favour of the assessee.

Issues: Whether an ex parte adjudication under Section 74, founded solely on electronic service of a show-cause notice after cancellation of GST registration, could be sustained.

Analysis: The notice was uploaded to the Common Portal more than three years after cancellation of registration. The binding departmental circular requiring physical service of notice in proceedings initiated after such cancellation recognised that a deregistered person may not access or be required to access the portal. Electronic-only service in those circumstances denied an effective opportunity to participate in the adjudication.

Conclusion: An ex parte adjudication founded on electronic-only service after cancellation of registration cannot be sustained; the noticee must receive an effective opportunity to reply, seek necessary documents or cross-examination, and be heard before fresh adjudication.

Issues: Whether omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 by Notification No. 20/2024 dated 08.10.2024 applies to pending proceedings.

Analysis: Rule 96(10) was omitted with effect from 08.10.2024. The binding position adopted was that the omission enures to the benefit of assessees in all proceedings pending on that date. Challenges to show-cause notices, orders-in-original and consequential refund claims were directed to be processed on that basis.

Conclusion: The omission of Rule 96(10) applies for the benefit of assessees in all pending proceedings.

Ratio Decidendi: An omission of a restrictive tax-rule provision, where declared applicable to pending matters, must be given effect in all proceedings pending on the date of omission.

Issues: (i) Whether writ jurisdiction could be invoked against the adjudication order despite the statutory appellate remedy where the challenges concerned invocation of Section 74, audit proceedings, consideration of the defence, and factual demand findings; (ii) Whether a consolidated show cause notice covering multiple financial years is without jurisdiction.

Issue (i): Whether writ jurisdiction could be invoked against the adjudication order despite the statutory appellate remedy where the challenges concerned invocation of Section 74, audit proceedings, consideration of the defence, and factual demand findings.

Analysis: Article 226 jurisdiction is ordinarily not exercised where an efficacious statutory appeal is available, except in cases such as breach of fundamental rights, denial of natural justice, patent excess of jurisdiction, or a challenge to vires. The challenge to the existence of fraud, wilful misstatement or suppression under Section 74 required examination of the show cause notice, material, replies and adjudication findings. The audit-related objections, alleged non-consideration of documents, payments or reversals, input-tax-credit eligibility, reverse-charge liability, export material and computation of demand likewise required factual appraisal. The assessee had participated in adjudication, filed its reply and produced supporting material; a dispute over the appreciation of that material did not establish a denial of hearing or a patent jurisdictional defect.

Conclusion: The writ jurisdiction was not liable to be exercised; the stated challenges must be pursued before the statutory appellate authority. This issue is against the assessee.

Issue (ii): Whether a consolidated show cause notice covering multiple financial years is without jurisdiction.

Analysis: The statutory expressions permitting notices for any period or such periods do not prohibit a single notice spanning more than one financial year. Although the time limit for passing an order is computed with reference to each financial year, that limitation framework does not mandate separate notices. Any limitation objection concerning a particular year's demand requires examination in the statutory appeal.

Conclusion: A consolidated show cause notice for multiple financial years is not, merely on that account, without jurisdiction. This issue is against the assessee.

Final Conclusion: The challenges disclose no exceptional circumstance displacing the specialised appellate mechanism, and the assessee may avail the statutory appeal in accordance with law.

Ratio Decidendi: Availability of an efficacious statutory appeal precludes writ intervention against GST adjudication where the asserted defects concern evidentiary appreciation or merits and do not establish a patent jurisdictional error or denial of natural justice; a consolidated notice across financial years is not inherently barred by the statutory scheme.

Issues: Whether the ex parte tax determination proceedings required a fresh hearing.

Analysis: The material facts pleaded by the petitioners were not disputed, and the respondents had not filed their affidavit-in-opposition. A fresh opportunity to raise objections was therefore directed, without examining the merits of the tax demand.

Outcome: The respondent authorities were directed to afford a fresh hearing and pass a reasoned order within four weeks.

Issues: Whether communication of audit findings in FORM GST ADT-02 can itself result in recovery without adjudication.

Analysis: Rule 101(5) read with Section 65(6) requires the proper officer, on completion of audit, to communicate the audit findings to the registered person in FORM GST ADT-02. Such communication is administrative in character and does not constitute a recovery action. Any further action must be taken under the applicable provisions of the Central Goods and Services Tax Act, 2017.

Conclusion: Communication of audit findings in FORM GST ADT-02 cannot by itself form the basis for recovery without further action in accordance with law.

Issues: Whether rejection of the application seeking waiver of penalty and interest under the KARA SAMADHANA scheme without disclosing reasons or material particulars was valid.

Analysis: The impugned notice did not disclose the material particulars or reasons for rejecting the application under Section 128A of the CGST/KGST Act, 2017. A non-speaking rejection lacking the basis for denial was illegal and arbitrary. The representation seeking reconsideration was required to be decided after affording sufficient and reasonable opportunity of hearing.

Conclusion: The rejection notice was invalid and was quashed in favour of the assessee; the representation was required to be reconsidered in accordance with law after hearing the assessee.

Issues: Whether later proceedings under Sections 73 and 74 for the same tax period could continue while an earlier GST proceeding remained pending.

Analysis: The earlier proceeding initiated by notice dated 19.02.2024 remained unresolved when subsequent notices, adjudication orders and consequential recovery action were initiated for the same tax period. Continuing those later proceedings would result in simultaneous adjudication. The earlier proceeding is to be determined after allowing production of documents supporting the exemption claim and a personal hearing; its consideration cannot be defeated on limitation because the intervening parallel proceedings had been commenced.

Conclusion: The later parallel notices, adjudication orders and consequential recovery action were quashed, while the earlier proceeding was retained for determination after affording the petitioner an opportunity to produce documents and be heard.

Issues: (i) Whether proceedings under Section 74 of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 could be sustained for the same tax period after adjudication under Section 73 had been completed; (ii) Whether the ex parte adjudication under Section 73 and consequential recovery proceedings required restoration for fresh consideration.

Issue (i): Whether proceedings under Section 74 of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 could be sustained for the same tax period after adjudication under Section 73 had been completed.

Analysis: The Section 74 proceedings covered the period that included the period already adjudicated under Section 73. The Section 73 adjudication preceded the Section 74 adjudication. Completion of a separate Section 74 proceeding after the Section 73 adjudication for the same period was incongruous.

Conclusion: In favour of the assessee. The Section 74 show-cause notice and adjudication proceedings were quashed.

Issue (ii): Whether the ex parte adjudication under Section 73 and consequential recovery proceedings required restoration for fresh consideration.

Analysis: The Section 73 proceedings had concluded ex parte. The assessee asserted entitlement to exemption and sought to place supporting documents for examination. A complete adjudication required consideration of those materials to determine whether the alleged mismatch or erroneous turnover declaration could be sustained.

Conclusion: In favour of the assessee. The Section 73 adjudication order and consequential garnishee notice were quashed, and the proceedings were restored for reconsideration after receipt of the assessee's reply and documents.

Final Conclusion: The overlapping Section 74 demand for the period already adjudicated under Section 73 cannot stand, while the Section 73 liability must be determined afresh upon consideration of the assessee's material.

Ratio Decidendi: For the same tax period, culmination of proceedings under Section 74 after completed adjudication under Section 73 is incongruous; an ex parte Section 73 adjudication may be restored where relevant material requires examination for a complete determination.

Issues: (i) Whether Central Tax Authorities could initiate proceedings on the same subject matter after State Tax Authorities had already initiated adjudication proceedings; (ii) Whether the State Tax adjudication orders required reconsideration to afford the assessee an opportunity to respond and substantiate its exemption claim.

Issue (i): Whether Central Tax Authorities could initiate proceedings on the same subject matter after State Tax Authorities had already initiated adjudication proceedings.

Analysis: Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 bars proceedings by a Central Tax proper officer on a subject matter for which proceedings have already been initiated by a proper officer under the State Goods and Services Tax Act. The State Authorities had initiated adjudication proceedings earlier for the relevant tax periods.

Conclusion: The Central Tax show cause notice and adjudication order on the same subject matter were impermissible and were quashed, in favour of the assessee.

Issue (ii): Whether the State Tax adjudication orders required reconsideration to afford the assessee an opportunity to respond and substantiate its exemption claim.

Analysis: The assessee asserted that a personal hearing sought in response to one notice had not been granted and that it could produce invoices, works contract documents and other records to establish eligibility for exemption where the value of goods supplied was below 25% of the works contract value. The records indicated that such material could be relevant to the exemption claim.

Conclusion: The State Tax adjudication orders and consequential garnishee notices were quashed, with liberty to file responses to the show cause notices and have all issues reconsidered, in favour of the assessee.

Final Conclusion: Parallel Central Tax proceedings are barred once State Tax proceedings on the same subject matter have commenced, while the surviving State Tax proceedings must be reconsidered after the assessee is afforded an opportunity to place its material on record.

Ratio Decidendi: Once proceedings on a subject matter are initiated by a State Tax proper officer, Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 prohibits initiation of proceedings by a Central Tax proper officer on that same subject matter.

Issues: Whether the officer who conducted an audit under Section 65 of the Karnataka Goods and Services Tax Act, 2017 could also adjudicate the proceedings and issue an order under Section 73(9) of that Act.

Analysis: The admitted position was that the same officer conducted the audit and issued the adjudication order. The applicable course, consistently with the coordinate-bench decision applied, was adjudication by a proper officer other than the audit officer, after permitting a further reply and affording an adequate hearing.

Conclusion: The Section 73(9) adjudication order issued by the audit officer was quashed, and the matter was directed to be adjudicated afresh by another proper officer.

Issues: Whether the authorities must consider and decide the contractor's pending representations claiming payment of GST after examining the tender terms, bills, invoices and payments.

Analysis: The GST component payable in respect of taxable services requires examination of the applicable rate, invoices, tender conditions and whether the final bills already included GST. Since the representations with supporting material remained undecided, the competent authorities were required to undertake that examination and communicate reasoned decisions. No adjudication of the contractor's actual entitlement to the claimed GST amounts was undertaken.

Outcome: The authorities were directed to independently decide the respective representations by reasoned and speaking orders within six weeks.

Issues: Whether an adjudication order could stand where the taxpayer specifically sought a personal hearing but was not informed of the date and time of hearing.

Analysis: The show-cause notice assured an opportunity of personal hearing, and the taxpayer expressly requested such hearing in Form GST DRC-06. No material established that the hearing date and time had been communicated. Consideration of the written reply alone did not cure the failure to afford the requested personal hearing.

Conclusion: The adjudication order was invalid for breach of the principles of natural justice and was quashed, with the matter requiring fresh adjudication after hearing the taxpayer.

Issues: Whether input tax credit could be rejected solely because returns were filed belatedly after the incorporation of Section 16(5).

Analysis: The incorporation of Section 16(5) altered the statutory time limits governing the filing of returns and availment of input tax credit. The rejection founded on belated filing of returns could therefore not be sustained.

Conclusion: Rejection of input tax credit on the ground of belated filing of returns was set aside, in favour of the assessee.

Issues: Whether the GST assessment order could be set aside and remitted for fresh adjudication despite expiry of the statutory appellate limitation, having regard to the petitioner's medical incapacity and undertaking to make a deposit.

Analysis: The assessment had followed a show-cause notice and an opportunity of personal hearing which was not availed. The appellate period had expired, but the petitioner had pursued rectification soon after the assessment and produced medical material showing incapacity due to cardiac illness during the relevant period. The petitioner also undertook to deposit 10% of the disputed tax and to furnish a reply with supporting documents.

Conclusion: The assessment is liable to be quashed and the matter restored for fresh merits adjudication upon compliance with the stipulated deposit and reply requirements.

Issues: Whether a taxpayer whose electronic credit ledger is blocked under Rule 86A may nevertheless utilise the blocked input tax credit for the pre-deposit required to file an appeal under Section 107.

Analysis: Section 49(4) permits utilisation of amounts in the electronic credit ledger towards output-tax payments only in the prescribed manner and subject to prescribed conditions and restrictions. Rule 86A is a provisional credit-blocking measure, requiring recorded reasons and operating for no longer than one year. Sections 49 and 107 must be read with Rule 86A: although an appellant may ordinarily use available electronic credit for statutory liabilities including pre-deposit, such utilisation is barred while a valid Rule 86A restriction remains in force. Rule 86A(2) permits unblocking where the conditions for restriction no longer exist.

Conclusion: Section 49(4) does not confer an absolute right to use blocked electronic credit for appeal pre-deposit. The request for unblocking must be decided expeditiously; if rejection is proposed, a speaking order must be issued after affording reasonable opportunity.

Issues: Whether a taxpayer has an absolute statutory right to use amounts in the electronic credit ledger for the appellate pre-deposit despite a credit-blocking order under Rule 86A.

Analysis: Section 49(4) permits use of electronic credit ledger balances towards output-tax payments only in the prescribed manner and subject to prescribed conditions and restrictions. Read with Section 107 and Rule 86A, an appellant may ordinarily use such credit towards liabilities including pre-deposit, but that facility is unavailable while a valid Rule 86A blocking order remains in force. Rule 86A is a provisional measure, requires recorded reasons, permits an application for unblocking, and restricts the measure to a maximum period of one year.

Conclusion: Section 49(4) does not confer an absolute right to use blocked electronic credit ledger amounts for making the appellate pre-deposit; such utilisation is impermissible during the operation of a Rule 86A blocking order.

Issues: (i) Whether rejection of input tax credit on construction intended for leasing without applying the Supreme Court precedent on "own account" construction was sustainable; (ii) Whether debit and recovery from electronic cash and credit ledgers without an intimation under Rule 142B(1) and expiry of seven days was valid.

Issue (i): Whether rejection of input tax credit on construction intended for leasing without applying the Supreme Court precedent on "own account" construction was sustainable.

Analysis: Section 17(5)(d) blocks input tax credit for construction of immovable property on a taxable person's own account, subject to its stated exceptions. The applicable Supreme Court precedent distinguishes construction for personal use or as the premises from which the taxable person conducts business from construction intended for sale, lease or licence, which cannot be characterised as construction on the taxable person's own account. The assessment findings treated ownership and capitalisation as determinative and rejected leasing as irrelevant, without addressing that binding distinction.

Conclusion: The rejection of input tax credit without applying the governing distinction regarding construction intended for leasing was unsustainable; the claim requires fresh consideration in favour of the assessee.

Issue (ii): Whether debit and recovery from electronic cash and credit ledgers without an intimation under Rule 142B(1) and expiry of seven days was valid.

Analysis: Rule 142B requires electronic intimation in Form GST DRC-01D of an amount recoverable under Section 79 and allows recovery measures only where the amount remains unpaid after seven days from that intimation. The prescribed intimation and waiting period were not complied with before the ledger debits. The underlying assessment orders also could not sustain recovery action.

Conclusion: The ledger debits and recovery were invalid; the amounts must be restored to the corresponding electronic ledger in favour of the assessee.

Final Conclusion: The assessee is entitled to reconsideration of the leasing-related input tax credit claim under the binding interpretation and to restoration of the amounts recovered without adherence to the prescribed recovery process.

Outcome: Writ petition disposed of as withdrawn with liberty to pursue the statutory appellate remedy.