Facts of the Case

Pursuant to an intimation in Form GST DRC-01A dated 20.07.2024, to which the petitioner did not respond, the respondent issued a show cause notice dated 28.11.2024 under Section 73(1) of the CGST/KGST Act, alleging that the taxable turnover declared in GSTR-3B was less than the turnover reflected in GSTR-1. As the petitioner again did not reply, the respondent passed the impugned order dated 18.02.2025 under Section 73(9) confirming a total demand of Rs.6,66,336/-, including tax, interest and penalty.

Issues Involved

  1. Whether an ex-parte demand order under Section 73(9), passed after intimation and show cause notices that were only uploaded on the common GST portal and not otherwise served, ought to be set aside where the assessee shows bona fide reasons for non-response.
  2. What conditions should attach to granting a fresh opportunity in such circumstances.

Petitioner's Arguments

  • The intimation and show cause notices were only uploaded on the common GST portal and went unnoticed, so the petitioner could not submit its reply or documents.
  • The failure to respond was due to bona fide reasons and unavoidable circumstances, and the petitioner sought one more opportunity to contest the proceedings on merits.

Respondent's Arguments

  • The HCGP submitted that the petitioner had been granted numerous opportunities by way of intimation notices, show cause notices and reminders, had not exercised due diligence in replying, and that the petition was without merit and liable to be dismissed.

Court Order / Findings

  • Adopting a justice-oriented approach, the Court accepted the petitioner's specific assertion of bona fide reasons and unavoidable circumstances for its inability to respond.
  • The impugned order dated 18.02.2025 passed under Section 73(9) of the KGST Act was set aside, and the matter remitted to the respondent for fresh consideration from the stage of the petitioner submitting a reply to the show cause notice dated 28.11.2024.
  • The relief was conditioned on the petitioner depositing 10% of the total tax demand (including interest and penalty) and appearing before the respondent on a fixed date, failing which the order would stand automatically recalled.

Important Clarification

  • Mere upload of a Form GST DRC-01A intimation and a Section 73 show cause notice on the common GST portal, without any other mode of communication, will not by itself defeat a claim of bona fide non-response, and courts continue to set aside resultant ex-parte demand orders for a fresh hearing.
  • Such relief is typically conditioned on the assessee depositing a percentage (here 10%) of the disputed demand and appearing on a fixed date, with the relief self-recalling if the condition is not met — balancing another opportunity to be heard against the department's revenue interest.

Sections Involved

  • Section 73(1) and (9), CGST/KGST Act, 2017 — show cause notice and order for tax not paid, short paid, or input tax credit wrongly availed (non-fraud cases).
  • Form GST DRC-01A — intimation of tax ascertained as payable, preceding a formal show cause notice.

Decision – In Favour of

In favour of the Assessee, subject to conditions. The ex-parte order was set aside and the matter remitted for a fresh opportunity on 10% pre-deposit.

Case Details

High Court of Karnataka at Bengaluru; WP No.30787 of 2025 (T-RES); Neutral Citation: 2025:KHC:42045; Coram: Hon'ble Mr. Justice S.R. Krishna Kumar; Date of Order: 23.10.2025.

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