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of <h1>SEZ tax demand for July 2017-March 2018 challenged; later Rule 30(4) change held prospective, demand order quashed.</h1> The dominant issue was whether the tax authority could confirm demand for July 2017-March 2018 by relying on a later notification amending Rule 30(4) of ... Maintainability of petition - availability of alternative remedy - petitioner had not produced the duly authorized / certified invoices - jurisdiction or authority of law to initiate the impugned proceedings or pass the impugned order - HELD THAT:- In the instant case it is an undisputed fact borne out from the material on record that the impugned proceedings pertain to the tax period July 2017 to March 2018 at a point in time, when neither the said notification amended Rule 30(4) nor the aforesaid Circular were in force and consequently, the first respondent clearly fell in error in applying the said Notification and Circular for the purpose of confirming the demand as against the petitioner, which is clearly contrary to the said Rules and the material on record, apart from being without jurisdiction or authority of law, warranting interference by this Court in the present petition. The present petition is not maintainable in view of availability of equally efficacious and alternative remedy by way of an appeal under Section 107 of the KGST Act is concerned, as stated supra, Rule 30(4) of the SEZ Rules and the Circular dated 12.09.2019 being prospective in nature, application and operation, the same would evidently not apply to subject tax period from July 2017 to March 2018, since the said Rules were amended with effect from 21.09.2018 and consequently, the impugned order insofar as it relates to confirming the demand by placing reliance on the prospective Rule and Circular would be clearly without jurisdiction or authority of law and consequently, mere availability of a remedy by way of an appeal would not be a bar for this Court exercising its jurisdiction under Article 226 of the Constitution of India. The impugned order is set aside - petition allowed. Issues: Whether the amendment to Rule 30(4) of the Special Economic Zones Rules, 2006 and the Circular dated 12.09.2019 applied to the tax period July 2017 to March 2018 such that the orders passed under Section 73 of the Karnataka GST Act, 2017 confirming tax liability for lack of authorised/endorsed invoices were valid; and whether those impugned orders are liable to be quashed.Analysis: Rule 30(4) was amended by notification dated 19.09.2018 which came into force on 21.09.2018 and the Circular dated 12.09.2019 implemented procedures thereafter. Both the amended rule and the Circular are prospective in operation and did not apply to transactions occurring before 21.09.2018. The impugned proceedings relate to the tax period July 2017 to March 2018, a period prior to the effective date of the amendment and the Circular. Confirming demand for that earlier tax period by relying on the subsequently amended Rule 30(4) and the Circular thus involved application of provisions that were not in force for the relevant period, amounting to lack of jurisdiction or authority to impose the demand. In these circumstances, the existence of an alternate remedy by way of appeal did not preclude the exercise of writ jurisdiction under Article 226 to correct the jurisdictional error.Conclusion: The impugned orders confirming tax, summary order and notice insofar as they rely on Rule 30(4) as amended and the Circular dated 12.09.2019 for the tax period July 2017 to March 2018 are without jurisdiction and are quashed; decision is in favour of the assessee.
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