Facts of the Case

The petitioner, Scorpio Engineering BMH Private Limited, was issued a show-cause notice dated 08.09.2025 under Section 73(1) of the CGST Act, and the respondent proceeded to pass an ex parte adjudication order dated 28.10.2025 under Section 73(9), demanding Rs. 13,22,535 as tax, interest and penalty, on the premise that the petitioner had not submitted any reply, contested the proceedings, or availed personal hearing. The petitioner approached the Karnataka High Court contending that it had in fact submitted replies dated 02.09.2025 and 12.09.2025, sent an email and authorisation letter, requested to appear online, and had actually appeared online on 17.10.2025.

Issues Involved

  1. Whether an ex parte adjudication order under Section 73(9), passed on the erroneous premise that the taxpayer filed no reply and did not contest the proceedings, can be sustained where the taxpayer in fact submitted replies and appeared for a hearing.

Petitioner's Arguments

  • The petitioner had submitted replies on 02.09.2025 and 12.09.2025, sent an email on 13.10.2025, an authorisation letter on 17.10.2025, requested permission to appear online, and did appear online on 17.10.2025 — contrary to the impugned order's recital that no reply was filed and no hearing availed.

Respondent's Arguments

  • The impugned order was correct and there was no merit in the petition, which was liable to be dismissed.

Court Order / Findings

  • The Court noted the undisputed fact that the impugned order recorded the petitioner as not having contested the proceedings or availed a personal hearing, and, without expressing any opinion on the merits/demerits of the rival contentions, found it just and appropriate to provide the petitioner one more opportunity.
  • The impugned adjudication order dated 28.10.2025 was set aside and the matter remitted to the respondent for reconsideration afresh, with liberty for the petitioner to submit replies/additional replies with documents, and a direction that the respondent provide sufficient and reasonable opportunity, including personal hearing, before proceeding further.

Important Clarification

  • Where an assessee disputes the factual premise of an ex parte adjudication order — asserting it had in fact filed replies and appeared at a hearing, contrary to the order's recitals — courts will generally set aside the order and remand for fresh consideration rather than adjudicate the factual dispute themselves, giving the taxpayer one more opportunity to be heard on the merits of the show-cause notice.

Sections Involved

  • Section 73(1), CGST Act, 2017 – show-cause notice for tax short-paid without fraud/suppression.
  • Section 73(9), CGST Act, 2017 – adjudication order determining tax, interest and penalty after considering the noticee's representation.

Decision – In Favour of

The decision is in favour of the assessee. The ex parte adjudication order was set aside and the matter remanded for fresh consideration with a full opportunity of hearing.

Case Details

Court: High Court of Karnataka at Bengaluru — Case No.: Writ Petition No. 36286 of 2025 (T-RES) — Coram: Hon'ble Mr. Justice S.R. Krishna Kumar — Date of Order: 5 December 2025.

Link to Download the Order

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