Facts of the Case

M/S Pragathi Enterprise, a Bengaluru sole proprietorship, challenged a chain of GST proceedings under Section 73 of the CGST/KGST Act, 2017 — a show-cause notice dated 21.12.2023 (Form DRC-01), the consequent order-in-original dated 21.03.2024 (Form DRC-07), and the first appellate order dated 05.12.2024 (Form APL-02) rejecting its appeal. The petitioner also challenged the attachment of its bank account and the initiation of proceedings under the notification issued invoking Section 168A of the CGST/KGST Act, and sought a ruling that mere uploading of notices on the 'Additional Notices' tab of the GST portal is not proper service under Section 169. The Karnataka High Court at Bengaluru, per Justice Suraj Govindaraj, disposed of the writ petition on 23 July 2025.

Issues Involved

  1. Whether the order-in-original and the appellate order can be sustained where they were passed without issuing notice or granting an opportunity of hearing to the petitioner.
  2. Whether the bank account attachment and consequential impact on GST registration should be reversed once the underlying orders are set aside.
  3. Whether the matter should be remitted to the show-cause stage rather than decided on the portal-service and Section 168A jurisdiction points raised.

Petitioner's Arguments

  • The impugned order-in-original dated 21.03.2024 and the appellate order dated 05.12.2024 were passed without issuing notice or affording any opportunity of hearing to the petitioner, in breach of natural justice.
  • The proceedings under Section 73 initiated pursuant to the notification issued under Section 168A of the CGST/KGST Act were without jurisdiction.
  • Service under Section 169 is proper only when it results in actual communication, and uploading notices merely under the 'Additional Notices' section of the GST portal does not amount to proper service.
  • Relied on the coordinate-Bench decision in M/s Eternity Projects v. Deputy Commissioner of Commercial Taxes (Audit)-3.2 (WP No. 30307/2024, decided 19.11.2024) on identical facts.

Respondent's Arguments

  • Learned AGA accepted notice on behalf of the respondents and did not seriously contest the applicability of the Eternity Projects precedent to the facts of the case.
  • No independent defence was advanced to justify passing the order-in-original and the appellate order without notice or an opportunity of hearing to the petitioner.

Court Order / Findings

  • The Court accepted that the case was squarely covered by M/s Eternity Projects v. Deputy Commissioner of Commercial Taxes (Audit), where an identical grievance — orders passed without notice or hearing — was upheld.
  • An order-in-original and an appellate order passed under the CGST/KGST Act without issuing notice or affording an opportunity of hearing to the assessee cannot be sustained and must be set aside, with the proceedings restored to the show-cause stage.
  • The show-cause notice dated 21.12.2023, the order-in-original dated 21.03.2024, and the appellate order dated 05.12.2024 were all set aside.
  • The petitioner's GST registration was directed to be restored, and the petitioner directed to appear before the Assistant Commissioner on 11.08.2025 without further notice, for the show-cause proceedings to continue afresh.

Important Clarification

  • Where an order-in-original or an appellate order under the CGST/KGST Act is passed without issuing notice or granting a hearing, the appropriate remedy is to set aside the entire chain of orders and restore the matter to the show-cause stage, not merely remand the appeal.
  • Consequential actions flowing from a vitiated assessment — cancellation of GST registration and bank attachment — fall along with the assessment order and must be reversed or restored once the order is set aside.

Sections Involved

  • Section 73, CGST/KGST Act, 2017 — determination of tax not paid/short paid; natural-justice safeguards in adjudication.
  • Section 168A, CGST/KGST Act, 2017 — power to extend time limits during exceptional circumstances, invoked as the basis for the SCN.
  • Section 169, CGST Act, 2017 — modes of service of notices, raised on the portal-upload issue but not separately decided.

Decision – In Favour of

Assessee (petitioner) — the show-cause notice, order-in-original and appellate order were set aside, GST registration restored, and the matter remitted to the show-cause stage.

Case Details

Court: High Court of Karnataka at Bengaluru. Case No.: WP No. 2160 of 2025 (T-RES). Coram: Hon'ble Mr. Justice Suraj Govindaraj. Date of Order: 23 July 2025.

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