Facts of the Case

M/S Furnaffair challenged, among other things, the order dated 30.08.2024 passed by the Assistant Commissioner of Commercial Tax under Section 73 of the KGST Act, 2017 (bearing Ref No. CTO/LGSTO-71/DRC-07/T-7/38/2024-2025), following a show-cause notice in FORM GST DRC-01. The petitioner had filed its reply dated 14.02.2024 to the show-cause notice, but contended that the reply was not considered and no opportunity of personal hearing under Section 75(4) was granted before the impugned order was passed.

Issues Involved

  1. Whether an order passed under Section 73 without considering the assessee's filed reply, and without affording an opportunity of personal hearing, can be sustained.

Petitioner's Arguments

  • The petitioner had filed its reply dated 14.02.2024 to the show-cause notice, but the second respondent, without considering that reply and without granting an opportunity of personal hearing under Section 75(4), passed the impugned order.
  • The order deserved to be quashed and the matter remitted for reconsideration, allowing the petitioner to submit its reply/documents afresh.

Respondent's Arguments

  • Learned HCGP for the respondents supported the impugned order and contended there was no merit in the petition.

Court Order / Findings

  • On perusal of the material, the Court found it undisputed that the petitioner had indeed filed a reply to the show-cause notice, and that the impugned order was passed without granting the petitioner an opportunity to produce necessary documents.
  • Adopting a "justice-oriented approach" to afford one more opportunity, the Court set aside the impugned order dated 30.08.2024 and remitted the matter to the second respondent for reconsideration afresh.
  • The second respondent was directed to consider the petitioner's reply dated 14.02.2024 and provide a reasonable opportunity of personal hearing before proceeding further in accordance with law.

Important Clarification

  • Where an assessee has in fact filed a reply to a Section 73 show-cause notice but the adjudicating authority passes an order without considering that reply and without granting personal hearing under Section 75(4), the order is liable to be set aside — courts adopt a justice-oriented approach and remit for fresh adjudication after due consideration of the reply and a proper hearing.

Sections Involved

  • Section 73, KGST/CGST Act, 2017 – determination of tax not paid for reasons other than fraud.
  • Section 75(4), KGST/CGST Act, 2017 – mandatory personal hearing before an adverse order.

Decision – In Favour of

Decided in favour of the Assessee. Order set aside and matter remitted for fresh consideration with a proper hearing.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: Writ Petition No. 16712 of 2025 (T-RES); NC: 2025:KHC:48425
  • Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
  • Date of Order: 24 November 2025

Link to Download the Order

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