Facts of the Case

The petitioner, Superseva Global Services Private Limited, was issued a show cause notice dated 12.10.2023 under Section 73(1) of the CGST/KGST Act. Having failed to submit a reply, the respondent confirmed a total demand of Rs.19,55,092/- (tax, interest and penalty) by order dated 12.09.2024 under Section 73(9). The petitioner approached the Karnataka High Court, submitting that its inability to reply and contest the proceedings was due to bona fide reasons and unavoidable circumstances, and sought one more opportunity to be heard.

Issues Involved

  1. Whether a taxpayer who failed to respond to a show cause notice under Section 73 due to bona fide, unavoidable circumstances should be granted a further opportunity to contest the proceedings, and on what terms.

Petitioner's Arguments

  • The inability to submit a reply and contest the proceedings was owing to bona fide reasons, unavoidable circumstances and sufficient cause.
  • If one more opportunity is granted by setting aside the impugned order, the petitioner would submit a reply to the show cause notice and contest the proceedings on merits.

Respondent's Arguments

  • There is no merit in the petition, and the same is liable to be dismissed.

Court Order / Findings

  • Adopting a 'justice oriented approach' in view of the specific assertion of bona fide reasons and sufficient cause, the Court set aside the impugned order dated 12.09.2024, subject to the petitioner depositing costs of Rs.20,000 to the Karnataka High Court Legal Services Authority within six weeks.
  • The matter was remitted to the respondent for reconsideration afresh in accordance with law, from the stage of the petitioner submitting a reply to the show cause notice dated 12.10.2023.
  • The petitioner was directed to appear before the respondent on a fixed date without awaiting further notice, with liberty reserved to submit replies and documents, failing which the order would stand automatically recalled.

Important Clarification

  • Where a taxpayer explains non-response to a Section 73 show cause notice as attributable to bona fide reasons, courts may adopt a justice-oriented approach and set aside the resultant demand for a fresh hearing, but will often condition such indulgence on payment of costs to a Legal Services Authority to balance the equities.

Sections Involved

  • Section 73(1) & (9), CGST/KGST Act, 2017 – show cause notice and confirmation of demand for tax not paid.

Decision – In Favour of

Disposed of in favour of the Assessee, subject to cost; the demand was set aside and the matter remanded for a fresh hearing on merits.

Case Details

High Court of Karnataka at Bengaluru; WP No.36714 of 2025 (T-RES); Coram: Hon'ble Mr. Justice S.R. Krishna Kumar; Order dated 05.12.2025.

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