Facts of the Case

M/S Biotics Lab Life Services Private Limited, Bengaluru, was issued a Form GST DRC-01A intimation dated 15.05.2024 followed by a show-cause notice dated 24.05.2024 under Section 73 of the CGST/KGST Act, 2017, alleging short payment of outward tax when GSTR-3B was compared with e-way bill data. As the petitioner did not respond, the respondent passed an ex-parte order dated 20.08.2024 under Section 73(9) confirming a total demand of Rs 41,24,793 comprising tax, interest and penalty. The petitioner contended that the notices, uploaded only on the common GST portal, were never separately communicated by e-mail or registered post and consequently went unnoticed, preventing it from filing any reply or attending the proceedings.

Issues Involved

  1. Whether an ex-parte order passed under Section 73(9) can be sustained where the taxpayer claims genuine unawareness of the notices uploaded only on the GST portal.
  2. Whether the assessee should be granted a further opportunity to reply and be heard before the demand is finally confirmed.

Petitioner's Arguments

  • The intimation and show-cause notice were uploaded on the common portal but never separately communicated by e-mail or registered post, so the petitioner remained genuinely unaware of the proceedings.
  • The inability to reply arose from bonafide reasons and unavoidable circumstances, not from any deliberate default.
  • If granted one more opportunity, the petitioner was ready to file a reply and contest the show-cause notice on merits.

Respondent's Arguments

  • The Additional Government Advocate submitted that the petition was devoid of merit and liable to be dismissed, since the notices had been duly uploaded on the statutory GST portal in the prescribed manner.

Court Order / Findings

  • The Court accepted the assessee's specific averment that its failure to respond stemmed from bonafide reasons and unavoidable circumstances rather than any wilful default.
  • Adopting a justice-oriented approach, the Court set aside the ex-parte order and remitted the matter for fresh consideration from the stage of reply to the show-cause notice, subject to the petitioner depositing costs of Rs 10,000 with the Karnataka State Legal Services Authority.
  • The petitioner was directed to appear before the respondent on a fixed date without awaiting a further notice, and to submit its reply and supporting documents, which the respondent was directed to duly consider after affording a proper hearing.
  • It was clarified that if the petitioner failed to appear on the appointed date, the order granting relief would stand automatically recalled.

Important Clarification

  • An ex-parte adjudication order under Section 73(9), passed after the assessee failed to respond to notices uploaded on the common portal, can still be set aside where genuine bonafide circumstances for non-response are shown.
  • Courts frequently condition such relief on payment of costs to discourage misuse while still ensuring the taxpayer is not shut out on natural justice grounds.
  • Relief is time-bound: non-appearance on the fixed date results in automatic revival of the original order without further reference to the Court.

Sections Involved

  • Section 73, CGST/KGST Act, 2017 – determination of tax not paid/short paid, no fraud alleged.
  • Form GST DRC-01A – pre-show-cause intimation under Rule 142(1A) of the CGST Rules.

Decision – In Favour of

The decision favours the assessee, M/S Biotics Lab Life Services, though relief was conditional — the writ petition was allowed subject to payment of Rs 10,000 costs and the matter was remitted for fresh adjudication on merits.

Case Details

High Court of Karnataka at Bengaluru – WP No. 27181 of 2025 (T-RES) – Neutral Citation: 2025:KHC:40510 – Coram: Hon'ble Mr. Justice S.R. Krishna Kumar – Order dated 13.10.2025.

Link to Download the Order

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