Facts of the Case

Sri G.S. Bhanuprakash, a civil contractor, challenged two ex-parte demand orders dated 27 July 2023 and 29 February 2024, passed under Section 73(9) of the CGST/KGST Act, 2017, confirming demands of Rs. 1,14,072 and Rs. 47,720 respectively, along with the consequential Form GST DRC-07 summary. The proceedings traced back to an intimation notice in Form GST DRC-01A dated 15 March 2023 and a show cause notice dated 19 May 2023 under Section 73(1), to neither of which the petitioner had responded — he claimed the notices were never actually served on him, preventing him from contesting the proceedings or claiming the Input Tax Credit benefit he asserted was due.

Issues Involved

  1. Whether ex-parte demand orders under Section 73(9) should be set aside where the taxpayer claims the pre-intimation notice (DRC-01A) and show cause notice were never served on him.
  2. Whether a fresh opportunity to contest the show cause notice and claim eligible input tax credit should be granted in such circumstances.

Petitioner's Arguments

  • Neither the pre-intimation notice under Form GST DRC-01A nor the subsequent show cause notice under Section 73(1) were served on the petitioner, preventing him from filing any reply or contesting the proceedings.
  • The petitioner's returns were correct and he was entitled to the Input Tax Credit benefit claimed, which the ex-parte orders had failed to consider.
  • Given bona fide reasons and unavoidable circumstances for the failure to respond, one further opportunity should be granted by setting aside the impugned orders.

Respondent's Arguments

  • The department opposed the petition on the ground that it lacked merit and was liable to be dismissed.

Court Order / Findings

  • Adopting a justice-oriented approach, the Court accepted the petitioner's specific assertion regarding non-service of the pre-intimation and show cause notices as sufficient cause warranting a fresh opportunity.
  • It held that the ex-parte orders dated 27.07.2023 and 29.02.2024 passed under Section 73(9) should be set aside and the matter remitted for reconsideration afresh from the stage of the petitioner submitting his reply to the Section 73(1) notice dated 19.03.2023 (as recorded in the order).
  • The petitioner was directed to appear before the respondent on a fixed date without awaiting fresh notice, with liberty to submit replies and documents, failing which the order would stand automatically recalled.

Important Clarification

  • A claim that statutory GST notices (DRC-01A and the Section 73(1) SCN) were never served is treated by the Karnataka High Court as sufficient bona fide cause to set aside resultant ex-parte demand orders and grant one further opportunity to contest the proceedings, including any Input Tax Credit claim.
  • As in comparable cases, such relief is conditioned on the taxpayer's appearance on a fixed date, failing which the setting-aside automatically lapses without further judicial intervention.

Sections Involved

  • Section 73, CGST/KGST Act, 2017 – determination of tax not involving fraud, sub-sections (1) and (9) covering the SCN and final order stages.
  • Form GST DRC-01A – the pre-intimation notice preceding a formal Section 73 show cause notice under Rule 142(1A) of the CGST Rules.

Decision – In Favour of

The decision is in favour of the assessee, with both ex-parte demand orders set aside and the matter remanded for adjudication after affording a genuine opportunity to respond.

Case Details

Court: High Court of Karnataka at Bengaluru. Case No.: Writ Petition No. 28645 of 2025 (T-RES). Coram: Hon'ble Mr. Justice S.R. Krishna Kumar. Date of Order: 30 October 2025.

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