Facts of the Case: M/s N S Industrial Hardware, a proprietorship concern based in Kolar, Karnataka, represented by Mr. Safeer Iqbal Sharief, was issued a show-cause notice dated 28.5.2024 under Section 73(1) of the CGST/KGST Act, 2017 by the Commercial Tax Officer, LGSTO-180. As the petitioner did not submit a reply, the respondent proceeded to pass an order dated 26.8.2024 under Section 73(9), in Form GST DRC-07, confirming a total demand of Rs.1,34,230 comprising tax, interest and penalty. The petitioner approached the High Court under Articles 226 and 227, seeking to quash the adjudication order and to relegate the matter to the show-cause notice stage so that books of account could be produced.

Issues Involved:

  1. Whether a Section 73(9) demand confirmed without the assessee's reply, where the non-response is attributed to bona fide, unavoidable circumstances, warrants being set aside and the matter remitted to the show-cause stage.

Petitioner's Arguments:

  • The inability to submit a reply to the pre-intimation and show-cause notices was due to bona fide reasons, unavoidable circumstances and sufficient cause.
  • If given one more opportunity, the petitioner would submit a reply, produce books of account, and contest the proceedings on merits.

Respondent's Arguments:

  • The learned High Court Government Pleader 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 assertion of bona fide reasons and sufficient cause for the default, and having noted this was not effectively rebutted, the Court adopted a "justice oriented approach" and afforded the petitioner one more opportunity.
  • The impugned order dated 26.8.2024 was set aside, and the matter remitted to the respondent from the stage of filing a reply to the show-cause notice dated 28.5.2024.
  • The petitioner was directed to appear before the respondent on 2.2.2026 without awaiting further notice, with liberty to file replies and documents; failure to appear would cause the order to stand automatically recalled.

Important Clarification:

  • Karnataka High Court continues its consistent practice of remitting Section 73 assessments to the reply stage — rather than deciding the tax dispute itself — wherever the assessee shows bona fide, unavoidable reasons for having missed the show-cause notice, subject to strict compliance conditions including a fixed appearance date and automatic recall on default.

Sections Involved:

  • Section 73(1) and 73(9), Central Goods and Services Tax Act, 2017 — issuance of show-cause notice and determination of tax not paid/short paid in non-fraud cases, culminating in an order in Form GST DRC-07.

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

Related Case Laws: See the same-day Karnataka High Court rulings in M/s Infomart (India) Pvt Ltd vs Asst Commissioner of Commercial Taxes (WP No. 37779 of 2025) and M/s Maruthi Logistics vs Assistant Commissioner GST West Commissionerate (WP No. 33498 of 2025), addressing comparable procedural-relief grounds under Section 73.

Case Details: High Court of Karnataka at Bengaluru | WP No. 37576 of 2025 (T-RES) | NC: 2025:KHC:53315 | Coram: Hon'ble Mr. Justice S.R. Krishna Kumar | Date of Order: 15.12.2025.

Link to Download the Order: View/Download the Order

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