A show cause notice issued under the GST Act based on an investigation by an improper officer is invalid and must be set aside.

ORDER :

1. Petitioner is involved in the transportation of goods and was registered under the provisions of the Central Goods and Services Tax Act, 2017 ('the CGST Act' for short) and the Karnataka Goods and Services Tax Act, 2017 ('the KGST Act' for short). On the ground that the petitioner along with several other persons have indulged in purchase of arecanut from several persons and supplying the same to various Gutkha manufacturers without payment of appropriate applicable GST, investigation has been initiated against the petitioner under the provisions of the GST Act, which has culminated in the impugned show cause notice dated 11.04.2023 being issued from respondent no.1 (vide Annexure-G to the writ petition). Aggrieved by the same, the present writ petition is filed.

2. The petitioner in the instant writ petition has prayed for the following reliefs:

"WHEREFORE, it is respectfully prayed that, this Hon'ble Court be pleased to:

i. Issue a writ of Certiorari or any other direction or writ for quashing the show cause notice dated 11/04/2023 issued by the Respondent 3 as showed in Annexure-G vide bearing no.GEXCOM/AC/FU/1423/2021-AE-OIO-COMMR-CGST-Bengaluru (NW) issued by the Respondent No.1 in the interest of justice and equity in so far as petitioner concerned only.

ii. Issue a writ of mandamus/order /direction/appropriate order directing the Respondent authorities to restore GST registration in the interest of equity and justice.

iii. Further direct the respondents to refund the pre-deposit of Rs.50 Lakhs with interest from the date of deposit till date of refund interest of justice and equity.

iv. Pass any order, or direction as deemed fit in the facts and circumstance of the case including cost in the interest of justice and equity."

3. However, in the course of the arguments, the learned counsel for the petitioner submitted that he would withdraw the prayer pertaining to restoration of GST registration with liberty to the petitioner to file a fresh writ petition or approach the Competent Authority for restoration of the same, as the same is not consequential for the issuance of the impugned show cause notice. Learned counsel for the respondents has no objection for the same. Hence, the writ petition insofar as it relates to the prayer of restoring the GST registration of the petitioner stands dismissed reserving the liberty to the petitioner to approach the appropriate authority or file a fresh writ petition pertaining to the same.

4. With regard to other prayers, the case of the petitioner is that investigation was initiated by respondent no.2 against the petitioner without jurisdiction. It is submitted that pursuant to the initiation of such investigation; inspection, search and seizure of several premises belonging to the petitioner as envisaged under Chapter 14 of the CGST Act/KGST Act was carried out, certain materials were seized and the petitioner was called for questioning and his submissions have been recorded. It is further submitted that the petitioner was forced to make a payment of Rs.50,00,000/- (Rupees Fifty Lakhs only) towards probable liability during investigation and the same has been paid by the petitioner under protest on 20.01.2021. It is submitted that all these things happened when the investigation was being done by respondent no.2. It is further submitted that the petitioner is not liable to pay the said amount of Rs.50,00,000/- (Rupees Fifty Lakhs only) and has not committed any mistake as alleged. It is contended that respondent no.2 never had the jurisdiction to conduct the investigation or inspection, search or seizure or demand payments towards the probable liability during investigation. It is submitted that respondent no.2 is not the proper Officer as envisaged under the said Acts. It is further submitted that thereafter respondent no.2 realized that he does not have the necessary jurisdiction and transferred the case to respondent no.3, who is the proper Officer, to conduct the necessary inve