- 1 - HC-KAR NC: 2025:KHC:53016 WP No. 37580 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 37580 OF 2025 (T-RES) BETWEEN: DAIWAJNA CREDIT CO OPERATIVE SOCIETY LTD (A SOCIETY REGISTERED UNDER KCS ACT, 1959) HEAD OFFICE RI HARI TOWERS, KANAKADASA ROAD, UDUPI (UDUPI DISTRICT) - 576101 BY ITS CEO I/C. MR. MOHAN RAO – AGED ABOUT 49 YEARS. …PETITIONER (BY SRI. MAHESH R UPPIN, ADVOCATE) AND: 1. THE STATE OF KARNATAKA BY ITS SECRETARY, DEPARTMENT OF REVENUE, VIKAS SOUDHA, BENGALURU – 560 001. 2. THE ASST. COMMISSIONER OF COMMERCIAL TAXES (AUDIT-4) VANIJYA TERIGE BHAVANA, 4TH FLOOR, MAIDAN ROAD, MANGALURU (D.K. DISTRICT) – 575 001. …RESPONDENTS (BY SMT.JYOTI.M.MARADI, HCGP) THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE BANK ACCOUNT ATTACHMENT ORDER ISSUED BY THE 2ND RESPONDENT BEARING NO. ACCT/AUDIT-4/2025-26 DATED 02-12-2025 MARKED AS ANNEXURE D, AND ENDORSEMENT DATED 05-12-2025 BEARING NO. 2025-26 ISSUED BY 2ND RESPONDENT MARKED AS ANNEXURE - F BY ISSUING A WRIT IN THE NATURE OF CERTIORARI. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:53016 WP No. 37580 of 2025 CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks for the following reliefs:- “ i) Set-aside the Bank Account attachment order issued by the 2nd Respondent bearing No.ACCT/AUDIT-4/2025-26 dated: 02.12.2025 marked as Annexure-‘D’ and Endorsement dated: 05.12.2025 bearing No.VaatheSaAa(Le.Pa)-4/M/2025-26 issued by 2nd respondent marked as Annexure-F by issuing a wit in the nature of Certiorari; and ii) Grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice.” 2. Heard learned counsel for the petitioner and learned HCGP for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that aggrieved by the adjudication order dated 01.09.2025 passed under Section 73(9) of the KGST Act, 2017, the petitioner filed statutory appeal under Section 107(1) of the KGST Act, after making mandatory pre-deposit of 10% of the tax amount in terms of Section 107(6)(b) of the Act, on the same day, the petitioner sent - 3 - HC-KAR NC: 2025:KHC:53016 WP No. 37580 of 2025 the details along with copy of the appeal to the appellate authority by speed post and also intimated the respondents. 4. It is the grievance of the petitioner that despite filing the appeal and making payment of 10% pre-deposit of the disputed tax amount, the 2nd respondent initiated recovery proceedings in contravention of Section 107(7) of the KGST Act, attaching Bank account of the petitioner on 02.12.2025 and the same was not revoked though the petitioner submitted representation in this regard and as such, the petitioner is before this Court by way of the present petition. 5. Per contra, learned HCGP for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed. 6. The undisputed material on record will indicate that on 25.11.2025 itself, the petitioner filed the appeal and deposited the mandatory pre-deposit of 10% of the tax amount. In this context, it is relevant to refer to Section 107(7) of the KGST Act, which reads as under:- - 4 - HC-KAR NC: 2025:KHC:53016 WP No. 37580 of 2025 “Section 107. Appeals to Appellate Authority.- (1) xxxxx (2) xxxxx (3) xxxxx (4)xxxxxx (5) xxxxx (6) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, 1[subject to a maximum of 3[twenty] crore rupees], in relation to which the appeal has been filed. [Provided that in case of any order demanding penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty has been paid by the appellant.] (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.” 7. The said provision contemplates and deems stay of recovery proceedings upon the petitioner filing an appeal and by depositing mandatory pre-deposit of 10% of disputed tax amount, - 5 - HC-KAR NC: 2025:KHC:53016 WP No. 37580 of 2025 consequently, the impugned attachment order deserves to be quashed. 8. In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned attachment order dated 02.12.2025 passed by the 2nd respondent is hereby set aside and consequently, the impugned Endorsement dated 05.12.2025 issued by the 2nd respondent is also hereby quashed. Sd/- (S.R.KRISHNA KUMAR) JUDGE Srl.