Reserved on : 12.02.2026 Pronounced on : 11.03.2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11^TH DAY OF MARCH, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND WRIT APPEAL No. 101 OF 2025 (T-RES)

BETWEEN:

1. ADDITIONAL COMMISSIONER OF CENTRAL TAX, BENGALURU NORTH-WEST COMMISSIONERATE, SOUTH WING, BMTC BUS STAND COMPLEX, SHIVAJINAGAR, BENGALURU-560051.

2. COMMISSIONER OF CENTRAL TAX, TRADE CENTRE, BUNTS HOSTEL ROAD, MANGALORE COMMISSIONERATE, MANGALORE-575003.

Digitally signed by VINUTHA B S

3. PRINCIPAL COMMISSIONER OF CENTRAL TAX Location:

BENGALURU NORTH-WEST COMMISSIONERATE, High Court of Karnataka SOUTH WING, BMTC BUS STAND COMPLEX, SHIVAJINAGAR, BENGALURU-560051.

…APPELLANTS (BY SRI SHISHIRA AMARNATH, ADVOCATE)

AND:

1. M/S. VIGNESHWARA TRANSPORT COMPANY, REPRESENTED BY ITS PROPRIETOR, MR. PRAVEEN SUVARNA, VIGNESHWARA NILAYA, PANCHAVATI VILLAS, BEHIND SHANTALA HERITAGE, VYASANGAR, YEYYADI, MANGALORE, KARNATAKA.

…RESPONDENT (BY SRI PRANAY SHARMA Y., ADVOCATE)

THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 28.11.2024 PASSED BY THE LEARNED SINGLE JUDGE IN WP No.18305/2023 ANNEXURE-A CONSEQUENTLY FURTHER UPHOLDING THE VALIDITY OF THE SHOW-CAUSE NOTICE DATED 11.04.2023 ISSUED BY THE ADDITIONAL COMMISSIONER OF CENTRAL TAX BENGALURU NORTH WEST COMMISSIONER.

THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, K.V. ARAVIND J., DELIVERED THE FOLLOWING:-

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. JUDGMENT (PER: HON'BLE MR. JUSTICE K.V. ARAVIND)

Heard Sri Shishira Amarnath, learned counsel for the appellants-Revenue and Sri Y. Pranay Sharma, learned counsel for the respondent-Assessee.

2. This intra-Court appeal is filed under Section 4 of the High Court Act, 1961, challenging the order dated 28.11.2024 passed in W.P. No.18305/2023 (T-RES) by the learned Single Judge.

Factual Matrix:

3. The respondent–assessee in this appeal is registered under the Central Goods and Services Tax Act, 2017 (for short, ‘the CGST Act’) and the Karnataka Goods and Services Tax Act, 2017 (for short, ‘the KGST Act’), and is engaged in the transportation of goods. An investigation conducted by the Mangaluru Commissionerate of the appellants revealed alleged manipulation of invoices and e-way bills, as well as unauthorized transportation activities. It was further found that the goods were removed clandestinely by evading Goods and Services Tax (GST).

3.1 The findings of the investigation were shared with the Bengaluru Commissionerate, which issued a show cause notice in accordance with law, alleging GST evasion and manipulation of documents. The said show cause notice was challenged in the writ petition, inter alia, contending that the officers who conducted the investigation lacked jurisdiction and that the material evidence gathered in the course of such investigation, being without jurisdiction, cannot be relied upon against the respondent–assessee. It was further contended that the search action conducted by the officers of the Mangaluru Commissionerate was without jurisdiction and contrary to the settled principles of law governing search and seizure.

3.2 The learned Single Judge, upon examination of various decisions, held that the officers of the Mangaluru Commissionerate, i.e., appellant No.2, were not “proper officers” competent to undertake inspection, search and seizure, or to issue the show cause notice. The learned Single Judge further held that the issuance of a show cause notice under Section 74 of the CGST Act, founded upon search and seizure proceedings and statements recorded by an officer lacking jurisdiction, cannot be sustained in law. It was observed that such a notice cannot be issued on “borrowed satisfaction.”

3.3 Accordingly, the learned Single Judge directed refund of ₹50.00 lakhs deposited by the respondent–assessee during the course of investig