Facts of the Case

M/s Fenceworks Production Private Limited, represented by its director Sri Sai Prashanth, filed WP No. 30807 of 2024 (T-RES) before the High Court of Karnataka at Bengaluru challenging an order dated 25.04.2024 passed by the Assistant Commissioner of Commercial Taxes (Audit 5.2), DGSTO-5 (Reference No. Case ID AD291223038269X/ADJ-No.16/2024-25), and the Form GST APL-02 acknowledgment dated 13.09.2024 by which the Joint Commissioner of Commercial Taxes (Appeals)-5 rejected the petitioner's appeal as time barred. A show cause notice dated 31.12.2023 had been issued under Section 73 of the CGST/KGST Act, 2017, to which the petitioner filed a reply dated 24.02.2024. Without considering this reply, the first respondent proceeded to pass the impugned adjudication order.

Issues Involved

  1. Whether an adjudication order passed under Section 73 without considering the taxpayer's reply and without affording an opportunity to produce documents violated principles of natural justice.
  2. Whether such an order, and the consequential rejection of the appeal as time-barred, was liable to be set aside in writ jurisdiction with the matter remitted for fresh consideration.

Petitioner's Arguments

  • Counsel for the petitioner submitted that the respondents, without considering the reply dated 24.02.2024, passed the impugned order, which deserved to be quashed.
  • It was submitted that the matter be remitted to the respondent for fresh reconsideration in accordance with law, by providing the petitioner an opportunity to submit a reply and produce necessary documents, followed by appropriate orders.
  • A further relief was sought for a direction to appoint a different adjudicating authority to adjudicate the matter for the period 2018-19.

Respondent's Arguments

  • Learned AGA for the respondents supported the impugned order and submitted that there was no merit in the petition, which was liable to be dismissed.

Court Order / Findings

  • The Court found, on a perusal of the material on record including the impugned order, that the order had been passed without granting the petitioner an opportunity to produce necessary documents.
  • Since the respondents had failed to consider the reply filed by the petitioner and had not provided a reasonable opportunity to produce documents, the Court, adopting a justice-oriented approach, deemed it appropriate to set aside the impugned order and remit the matter for fresh consideration.
  • The petition was allowed; the order dated 25.04.2024 (Annexure-A) was set aside, and the first respondent was directed to consider the reply dated 24.02.2024 filed by the petitioner and proceed thereafter in accordance with law.
  • The petitioner was directed to appear before the first respondent on 02.02.2026 without awaiting further notice, with liberty to submit replies and documents, which the respondent was directed to consider after granting sufficient and reasonable opportunity of hearing.
  • The Court further directed that if the petitioner failed to appear on the fixed date, the order would stand automatically recalled without further orders.

Important Clarification

  • An adjudication order passed under Section 73 without considering a reply already filed by the taxpayer, or without affording an opportunity to produce supporting documents, offends principles of natural justice and is liable to be set aside on writ, irrespective of the availability of the statutory appellate remedy.
  • On remand, courts commonly fix a specific appearance date before the adjudicating authority and provide for automatic recall of the relief if the taxpayer fails to appear, ensuring compliance without the need for further orders.

Sections Involved

  • Section 73 of the CGST/KGST Act, 2017 – determination of tax not paid or short paid for reasons other than fraud, under which the show cause notice and impugned adjudication order were issued.
  • Section 107 of the CGST/KGST Act, 2017 – statutory appeal remedy, under which the petitioner's appeal was rejected as time-barred.
  • Articles 226 and 227 of the Constitution of India – writ jurisdiction invoked to challenge the adjudication and appellate orders.

Decision – In Favour of

In favour of the Assessee; the impugned adjudication order was set aside for non-consideration of the petitioner's reply, and the matter was remitted for fresh adjudication with a fixed appearance date, though no finding was recorded on the merits of the underlying tax demand or on the prayer for appointment of a different adjudicating authority.

Related Case Laws

  • See our earlier case notes on Karnataka High Court orders setting aside Section 73 GST demands passed without considering the taxpayer's reply.
  • See our case notes on remand orders directing fresh adjudication with fixed appearance dates before GST authorities.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: WP No. 30807 of 2024 (T-RES) [NC: 2025:KHC:53371]
  • Parties: M/s Fenceworks Production Private Limited vs Assistant Commissioner of Commercial Taxes & Anr.
  • Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
  • Date of Order: 15.12.2025

Link to Download the Order

You can view/download the full text of the order here: https://mytaxexpert.co.in/uploads/1787068106_4529compressed.pdf

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