Prospective application of amended tax rules cannot sustain an earlier-period demand, and writ jurisdiction remains available despite appellate remedy.

A demand for the July 2017 to March 2018 tax period could not be upheld on the basis of amended Rule 30(4) of the Special Economic Zones Rules, 2006 or the circular dated 12.09.2019, because both operated prospectively and came into force after the relevant period. The demand was therefore treated as resting on an inapplicable legal basis and as without jurisdiction. The availability of an appellate remedy under Section 107 of the Karnataka Goods and Services Tax Act, 2017 did not bar writ jurisdiction where the impugned action lacked jurisdiction. The writ petition was accordingly allowed.

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Issues: Whether the demand confirmed for the tax period July 2017 to March 2018 could be sustained on the basis of the amended Rule 30(4) of the Special Economic Zones Rules, 2006 and the circular dated 12.09.2019, and whether the availability of an appellate remedy barred the writ petition.

Analysis: The amended Rule 30(4) came into force on 21.09.2018 and the circular relied upon was issued on 12.09.2019. The impugned proceedings related to a period anterior to both instruments. On that basis, the Court held that the amendment and the circular were prospective and could not be applied to the subject tax period. The demand was therefore treated as having been confirmed on an inapplicable legal basis and as being without jurisdiction. In these circumstances, the existence of an alternative remedy under Section 107 of the Karnataka Goods and Services Tax Act, 2017 did not operate as a bar to writ jurisdiction.

Conclusion: The confirmation of demand based on the amended rule and circular was unsustainable, and the writ petition was allowed.

Ratio Decidendi: A demand for an earlier tax period cannot be sustained by applying a later-amended rule or circular that operates prospectively, and writ jurisdiction may be exercised where the impugned action is without jurisdiction despite an available appellate remedy.

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