Facts of the Case

The petitioner, M/s Urmila Automobiles, Balasore, was assessed under Section 73 of the CGST/OGST Act, 2017 for the tax period July 2017 to March 2018, vide order dated 18.04.2023 passed by the Additional State Tax Officer, CT & GST, Balasore Circle. The assessment was passed ex parte, as the petitioner was unable to appear or file a reply to the show cause notice dated 23.02.2023, on account of suffering from a back-ache disease for which he produced a medical certificate.

Issues Involved

  1. Whether the ex-parte assessment order should be set aside in view of the petitioner's inability to respond to the show cause notice due to a genuine medical condition.

Petitioner's Arguments

  • The petitioner was suffering from back-ache disease, supported by a medical certificate, which prevented him from responding to the show cause notice and participating in the assessment proceedings.

Respondent's Arguments

  • No specific opposing submissions are recorded beyond appearance through the Additional Standing Counsel for CT & GST.

Court Order / Findings

  • The Court held that the petitioner ought to be given one more chance to first reply to the show cause notice and then appear before the assessing authority for a fresh assessment order to be passed in accordance with law.
  • The ex-parte assessment order dated 18.04.2023 was set aside, with a direction that the petitioner file a reply to the show cause notice by 4th December 2023, following which the matter would be taken up on 11th December 2023 and a fresh assessment order passed within two months thereafter.
  • The petitioner was given liberty to seek appropriate remedies against any adverse fresh order.

Important Clarification

Where a taxpayer's failure to respond to a GST show cause notice, resulting in an ex-parte Section 73 assessment, is attributable to a genuine and medically-documented inability to participate, courts will set aside the ex-parte order and grant one further opportunity to reply and be heard, rather than treating the earlier non-participation as fatal to relief.

Sections Involved

  • Section 73, Central Goods and Services Tax Act, 2017 / Odisha Goods and Services Tax Act, 2017 – governs determination and assessment of tax not paid or short paid other than by reason of fraud, requiring a show cause notice and opportunity of hearing before an order is passed.

Decision – In Favour of

The writ petition was disposed of with the ex-parte assessment set aside and remand for fresh assessment after opportunity to reply — the outcome favours the Assessee procedurally.

Case Details

Court: High Court of Orissa at Cuttack
Case No.: W.P.(C) No.28296 of 2023
Coram: Dr. Justice S.K. Panigrahi and Mr. Justice G. Satapathy
Date of Order: 12.09.2023

Link to Download the Order

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