Facts of the Case

M/s. Pragati Construction, the petitioner, is a works contractor who challenged an order dated 23.11.2023 passed by the Deputy Commissioner of State Tax, CT & GST, Bargarh Circle, Bargarh, Odisha, under Section 73 of the OGST Act, 2017, for the tax period 1st July 2017 to 31st March 2018. The matter was taken up through hybrid mode before the Division Bench. The impugned order was passed ex parte: the petitioner had neither filed a reply to the show cause notice (SCN) dated 27.09.2023 nor appeared before the assessing authority in response to it. The petitioner explained that he was suffering from "Reeling of Head & Imbalance of Gait", a medical condition for which he was undergoing treatment at the relevant time, and a medical certificate documenting this ailment was placed before the Court in support of his explanation for the default.

Issues Involved

  1. Whether an ex parte assessment order passed under Section 73 of the OGST Act, without the petitioner having replied to the SCN or being heard, could be sustained where the petitioner offered a bona fide medical explanation.
  2. Whether the petitioner should be granted a further opportunity to reply to the SCN and be heard before a fresh assessment order is passed.

Petitioner's Arguments

  • The petitioner was medically incapacitated by "Reeling of Head & Imbalance of Gait" and could neither reply to the SCN dated 27.09.2023 nor appear before the assessing authority, as evidenced by the medical certificate on record.
  • Given this genuine hardship, the ex parte assessment order dated 23.11.2023 ought to be set aside and one further opportunity granted to file a reply and be heard before any fresh order is passed.

Respondent's Arguments

  • The Additional Standing Counsel for the CT & GST Organisation appeared for the opposite parties and did not dispute that the SCN dated 27.09.2023 had gone unanswered and that the assessment order had been passed ex parte.
  • No independent objection was pressed to the petitioner being afforded a further opportunity, leaving the matter to the Court's discretion on the facts presented.

Court Order/Findings

  • The Court held that the petitioner ought to be given one more chance to first reply to the SCN and then appear before the assessing authority for a fresh assessment order to be passed in accordance with law, given the ex parte nature of the impugned order and the medical explanation offered.
  • The impugned assessment order dated 23.11.2023 was set aside. The petitioner was directed to file a reply to the SCN dated 27.09.2023 on or before 02.01.2024; the matter would then be taken up on 08.01.2024, and a fresh assessment order passed within two months thereafter.
  • Liberty was reserved to the petitioner to seek appropriate remedies in accordance with law if aggrieved by the fresh order.

Important Clarification

An ex parte order passed under Section 73 of the GST law, where the taxpayer neither replied to the SCN nor appeared, can still be set aside if the taxpayer shows a bona fide reason — such as documented medical incapacity — for the default. Courts will typically grant one further, time-bound opportunity to reply and be heard rather than allow the ex parte order to stand, without expressing any view on the merits of the underlying tax demand.

Sections Involved

  • Section 73 of the OGST Act, 2017 — determination of tax not paid, short paid, or input tax credit wrongly availed/utilised, for reasons other than fraud or wilful misstatement.

Decision – In Favour of

The order is disposed of with directions, in favour of the Assessee to the extent that the ex parte assessment order has been set aside on natural-justice grounds and a fresh, time-bound opportunity to reply and be heard has been granted. The Court did not examine or decide the merits of the underlying tax demand, which remains open for fresh adjudication by the assessing authority.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Orissa at Cuttack
  • Case No.: W.P.(C) No.41802 of 2023
  • CNR: Not available
  • Coram: Acting Chief Justice Dr. B.R. Sarangi and Mr. Justice Murahari Sri Raman
  • Decision Date: 21 December 2023
  • Disposal Nature: Ex parte assessment order set aside; matter remanded

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