Karnataka High Court
Tanveer Gulamhusen Gavandi vs The State Of Karnataka on 18 February, 2026
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NC: 2026:KHC-D:2541
WP No. 108111 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA, AT DHARWAD
DATED THIS THE 18TH DAY OF FEBRUARY 2026
BEFORE
THE HON'BLE MRS JUSTICE K.S.HEMALEKHA
WRIT PETITION NO. 108111 OF 2025 (T-RES)
BETWEEN:
TANVEER S/O. GULAMHUSAIN GAVANDI
AGE. 40 YEARS, OCC. PROPRIETOR,
R/O. 324, P.B. ROAD,
NEAR VEGETABLE MARKET,
BELAGAVI-590016,
GSTIN.29AILPG5249G1Z0.
...PETITIONER
(BY SRI. PUNEET I. BADIGER, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY,
FINANCE DEPARTMENT, VIDHAN SOUDHA,
AMBEDKAR VEEDHI-BENGALURU-560001.
2. THE ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES,
MANJANNA LGSTO-380, SUMOULYA SOUDHA,
E 3RD FLOOR, CLUB ROAD,
Digitally signed by
BELAGAVI-590001.
MANJANNA E
Location: HIGH COURT
OF KARNATAKA
DHARWAD BENCH
Date: 2026.02.25
3. COMMERCIAL TAX OFFICER
11:43:06 +0530
GOODS AND SERVICE TAX OFFICE-380,
BELAGAVI-590002.
...RESPONDENTS
(BY SRI. PRAVEEN K.UPPAR, AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI QUASHING THE IMPUGNED ORDER PASSED BY THE
RESPONDENTNO.3 U/S 73 (9) OF THE ACT, IN NO. VAATEAA.LGSTO-
380/73A/2023-24/B-2036, DATED 18/08/2023 VIDE ANNEXURE-D,
AND CONSEQUENTLY ALLOW THE PETITION IN THE INTEREST OF
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NC: 2026:KHC-D:2541
WP No. 108111 of 2025
HC-KAR
JUSTICE AND EQUITY; ISSUE A WRIT OF MANDAMUS RESTRAINING
THE RESPONDENTS FROM INITIATING ANY FURTHER COERCIVE
PROCEEDINGS PURSUANT TO THE IMPUGNED ORDER PASSED BY THE
RESPONDENT NO. 3 DATED 18/08/2023 IN NO.VAATEAA.LGSTO-
380/73A/2023-24/B-2036, VIDE ANNEXURE-D; AND ETC.
THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA
ORAL ORDER
The petitioner has approached this Court seeking to quash the order dated 18.08.2023 passed by respondent No.2 under Section 73 (9) of the Karnataka Goods and Services Tax Act KGST Act, 2017 ('Act' for short) for the financial year 2017-18, whereby, tax, interest and penalty has been determined and confirmed and further seeks for consequential protection from coercive recovery proceedings.
Brief facts:
2. The petitioner is a registered dealer under the CGST/KGST Act engaged in the business of Iron and Steel.
For the financial year 2017-18, scrutiny proceedings were initiated under Section 61 of the Act. A notice in Form -3- NC: 2026:KHC-D:2541 WP No. 108111 of 2025 HC-KAR ASMT-10 dated 22.08.2022 was issued pointing out discrepancies between GSTR-3B, GSTR-1 and GSTR-2A. Thereafter, pre-intimation in Form DRC-01A was issued, and show cause notice issued under Section 73(1) and ultimately Order under Section 73(9) dated 18.08.2023 was passed confirming liability at Annexure-D.
3. The demand is primarily based on difference in outward supplies, alleged ITC mismatch between GSTR-3B and GSTR-2A and interest and penalty under Section 73 (9) of the Act.
4. Learned counsel for the petitioner submits that the impugned order is mechanical, without proper consideration of reconciliation statement. It is submitted that the ITC cannot be denied solely on mismatch between GSTR-3B and GSTR-2A. It is contended that the petitioner was not afforded an effective personal hearing as required under Section 75 (4) of the Central Goods and Services Tax Act, 2017 ('CGST Act' for short). The discrepancy occurred -4- NC: 2026:KHC-D:2541 WP No. 108111 of 2025 HC-KAR due to the initial implementation phase of GST and was a bona fide reporting error. It is submitted that the petitioner is willing to pay the admitted outward difference. The Circular No.183/15/22-GST permits reconciliation of ITC mismatch which has not been considered.
5. Per contra, learned counsel appearing for the respondent submits that the writ petition is not maintainable due to statutory appeal remedy under Section 107 of the CGST Act. Adequate opportunity was granted at all stages. The petitioner did not respond to the notices and liability was computed based on verification of the returns and statutory records and the order under Section 73(9) is legal and proper.
6. This Court has carefully considered the rival submissions and perused the material on record. The point that arises for consideration is:
"Whether the writ petition is maintainable in view of the alternative remedy under Section 107 of the CGST Act and whether the impugned order -5- NC: 2026:KHC-D:2541 WP No. 108111 of 2025 HC-KAR under Section 73(9) of the Act reflects proper consideration of reconciliation and opportunity?"
7. It is settled law that existence of alternative remedy does not bar exercise of writ jurisdiction where
i) principles of natural justice are violated, ii) order is passed mechanically, iii) jurisdictional error is apparent, and
iv) foundational procedural safeguards are ignored. Though Section 107 provides an alternative remedy, this Court finds from the impugned order at Annexure-D that the dispute relates to reconciliation of ITC during the initial GST implementation year. The impugned order is largely based on a portal mismatch and that there is no detailed discussion of reconciliation documents and the reasoning portion is primarily tabular and computational. No personal hearing compliance under Section 75(4) is clearly demonstrated.
8. Section 73 applies to non-fraud cases. Penalty under Section 73(9) is consequential upon determination. The object of Section 73(1) provides for issuance of show -6- NC: 2026:KHC-D:2541 WP No. 108111 of 2025 HC-KAR cause notice where tax is not paid/short paid or ITC wrongly availed other than by fraud or suppression. Section 73 (9) describes that after considering the representation, the proper officer shall determine tax, interest and imposed penalty of 10% of the tax or ₹10,000/- whichever is higher. The object of Section 73 is to ensure fair adjudication after giving an opportunity to the assessee.
9. It is not intended to operate mechanically on auto-generated mismatched data. The denial of ITC solely on GSTR-2A mismatch without verifying supplies compliance and book of accounts would defeat the scheme of GST. The adjudication must be based on independent examination i) purchase register, ii) tax invoices, iii) supply status, iv) reconciliation statements. The impugned order does not reflect any such exercise.
10. Thus, the matter requires fresh reconsideration. Accordingly, the point framed for consideration is answered and this Court pass the following:
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NC: 2026:KHC-D:2541 WP No. 108111 of 2025 HC-KAR ORDER i. The writ petition is allowed in part.
ii. The impugned order dated 18.08.2023 (Annexure-D) is hereby set aside.
iii. The matter is remitted back to respondent No.2 for fresh adjudication.
iv. The petitioner is at liberty to file reconciliation statement, produce book of accounts, pay admitted outward difference.
v. The authority shall after affording a personal hearing, consider the reconciliation under Circular No.183/15/22-GST and pass reasoned order in accordance with law with Section 73 of the CGST Act.
vi. Till such consideration, no coercive step shall be taken.
vii. All contentions are kept open.
Sd/-
JUSTICE K.S.HEMALEKHA AT Ct:VH/ List No.: 1 Sl No.: 52