Facts of the Case

M/s Mineral Enterprises Private Limited, Bengaluru, was issued intimations in Form ASMT-10 dated 13.09.2022 and 14.09.2022 concerning an Input Service Distributor (ISD) issue and an output tax issue respectively, followed by show cause notices dated 14.06.2023 and 14.09.2023 under the CGST/KGST Act, 2017. The petitioner did not respond, leading the Assistant Commissioner of Commercial Taxes, LGSTO-040, to pass ex-parte adjudication orders dated 21.12.2023 and 23.12.2023 under Section 73, generating demands via Form DRC-07 for Financial Year 2017-18. Appeals filed under Section 107 were both rejected by the Joint Commissioner (Appeals) on 11.02.2025. The petitioner approached the High Court of Karnataka at Bengaluru, which decided the matter by oral order dated 14.10.2025.

Issues Involved

  1. Whether ex-parte assessment orders passed after the assessee failed to respond to ASMT-10 intimations and show cause notices should be set aside where non-receipt of notices is claimed.
  2. Whether the appellate rejection of both appeals should also be quashed as a consequence.
  3. Whether the assessee should be granted a fresh opportunity to file replies and contest the demands on merits.

Petitioner's Arguments

  • The petitioner did not receive the ASMT-10 intimations, the show cause notices, or the ex-parte orders, and was therefore unable to file any reply or contest the proceedings.
  • Due to these bona fide reasons and unavoidable circumstances, sufficient cause existed for the Court to set aside the impugned orders dated 21.12.2023 and 23.12.2023.
  • The matter should be remitted to the stage of filing a reply to the show cause notices so the petitioner could meaningfully contest the ISD and output tax issues on merits.

Respondent's Arguments

  • The department's counsel submitted that there was no merit in the petition and that it was liable to be dismissed, without specifically rebutting the claim of non-receipt of notices.

Court Order / Findings

  • The Court noted it was an undisputed fact that the petitioner did not submit any reply to the show cause notices nor participate in the proceedings, resulting in ex-parte adjudication orders.
  • Adopting a justice-oriented approach, the Court held that the petitioner deserved one more opportunity to file a reply and contest the proceedings, and set aside both ex-parte orders along with the consequential appellate rejections.
  • The impugned orders dated 21.12.2023 and 23.12.2023, and the appellate orders dated 11.02.2025, were all quashed, and the matter remitted to the stage of the petitioner filing replies to the show cause notices.
  • The petitioner was directed to appear before the concerned authority on 18.11.2025 without awaiting further notice, failing which the order would stand automatically recalled.
  • Liberty was reserved to file replies and documents, which the department was directed to consider after granting a reasonable hearing.

Important Clarification

  • Courts frequently grant assessees a final opportunity to contest ex-parte GST demands even where the department claims notices were duly issued, especially when non-receipt is asserted and no reply was ever filed.
  • Such relief is typically conditional — the petitioner must appear on a fixed date without further notice, and default results in automatic revival of the impugned orders.
  • Setting aside the assessment order necessarily also unwinds the appellate rejection founded on it, restoring the matter to the pre-show-cause-notice stage.

Sections Involved

  • Section 73, CGST/KGST Act, 2017 — determination of tax not paid or short paid, including on Input Service Distributor and output tax mismatches, for reasons other than fraud.
  • Section 107, CGST/KGST Act, 2017 — governs filing and disposal of appeals against adjudication orders before the First Appellate Authority.

Decision – In Favour of

Decided in favour of the assessee. Both ex-parte assessment orders and the consequential appellate rejections were quashed, with the matter remitted for the petitioner to file replies and be heard afresh.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 16988 of 2025 (T-RES)
Neutral Citation: 2025:KHC:41022
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Decision: 14.10.2025

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