Facts of the Case: M/s Infomart (India) Private Limited, Bengaluru, represented by its director Smt. Anjali Agarwal, was issued a show-cause notice dated 2.4.2024 under Section 73(1) of the CGST/KGST Act, 2017. The notice was handed over to the company's Chartered Accountants, M/s Keshav & Co., for a suitable reply, but the concerned CA could not submit a response due to health issues affecting himself and his child. As no reply was filed, the Assistant Commissioner of Commercial Taxes passed an ex-parte order dated 1.8.2024 under Section 73, confirming a total demand of Rs.3,32,848 towards tax, interest and penalty. Following recovery notices, the petitioner filed an appeal on 10.9.2025, which was dismissed as time-barred by the Joint Commissioner (Appeals) vide order dated 12.9.2025 in Form GST APL-04. With the GST Appellate Tribunal not yet constituted, the petitioner approached the High Court under Articles 226 and 227.

Issues Involved:

  1. Whether an ex-parte Section 73 assessment order, passed after the assessee's professional could not reply to the show-cause notice due to bona fide, unavoidable circumstances, warrants being set aside.
  2. Whether the appellate rejection on limitation should stand in the absence of a functioning GST Appellate Tribunal.

Petitioner's Arguments:

  • The failure to reply to the show-cause notice was solely due to the Chartered Accountant's health emergency, both to himself and his child — a bona fide, unavoidable circumstance and sufficient cause.
  • Since the GST Appellate Tribunal has not been constituted, the petitioner had no alternate remedy but to approach the High Court.
  • Sought one further opportunity to file a reply to the show-cause notice and contest the proceedings on merits.

Respondent's Arguments:

  • The Additional Government Advocate submitted that there was no merit in the petition and that it was liable to be dismissed.

Court Order / Findings:

  • Having regard to the specific and unrebutted assertion that the default was due to bona fide reasons and sufficient cause, the Court adopted a "justice oriented approach" and granted the petitioner one more opportunity.
  • Both the ex-parte order dated 1.8.2024 (Annexure-A) and the appellate rejection order dated 12.9.2025 (Annexure-B) were set aside and the matter remitted to the Assistant Commissioner from the stage of filing a reply to the show-cause notice dated 2.4.2024.
  • The petitioner was directed to appear before the Assistant Commissioner on 2.2.2026 without awaiting further notice, with liberty to file replies/documents; non-appearance would cause the order to stand automatically recalled.

Important Clarification:

  • Karnataka High Court continues to adopt a justice-oriented approach in remitting Section 73 matters to the reply stage where non-response to a show-cause notice is attributable to bona fide, unavoidable circumstances — particularly significant given the continuing non-constitution of the GST Appellate Tribunal, which leaves writ jurisdiction as the only practical remedy.

Sections Involved:

  • Section 73, Central Goods and Services Tax Act, 2017 — determination of tax not paid/short paid in non-fraud cases.
  • Section 107(11), Central Goods and Services Tax Act, 2017 — powers of the Appellate Authority, including rejection on limitation.

Decision – In Favour of: Assessee. Both impugned orders set aside; matter remitted for fresh consideration with an opportunity to reply.

Related Case Laws: Compare the Karnataka High Court's parallel approach in M/s N S Industrial Hardware vs Commercial Tax Officer, LGSTO-180 (WP No. 37576 of 2025) and M/s Maruthi Logistics vs Assistant Commissioner GST West Commissionerate (WP No. 33498 of 2025), both decided the same day on comparable procedural-fairness grounds under Section 73.

Case Details: High Court of Karnataka at Bengaluru | WP No. 37779 of 2025 (T-RES) | NC: 2025:KHC:53306 | Coram: Hon'ble Mr. Justice S.R. Krishna Kumar | Date of Order: 15.12.2025.

Link to Download the Order: View/Download the Order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.