Facts of the Case

M/s Vyasa Seeds Private Limited (GSTIN 29AADCV6577G1ZT) challenged an order dated 26.08.2024 passed under Section 73(9) read with Sections 61 and 50 of the CGST/KGST Act, 2017, for the period April 2019 to March 2020, along with the consequential DRC-07 dated 27.08.2024, contending that the order had been passed without any notice or opportunity of hearing being provided.

Issues Involved

  1. Whether an adjudication order under Section 73(9) can stand where it was passed without issuing notice or affording an opportunity of hearing to the assessee.

Petitioner's Arguments

  • The lis was covered by the coordinate bench ruling in M/s. Eternity Projects v. The Deputy Commissioner of Commercial Taxes (Audit)-3.2 (WP No.30307/2024), which held an identical order invalid for want of notice/opportunity of hearing.

Respondent's Arguments

  • The Additional Government Advocate accepted notice on behalf of the respondents; no substantive opposition to the petitioner's contention is recorded.

Court Order / Findings

  • Following Eternity Projects, the Court set aside the impugned order dated 26.08.2024.
  • It directed that the petitioner's GST registration shall stand restored.
  • The matter was relegated to the stage of the show cause notice, with the petitioner directed to appear before the respondent on a fixed date without further notice.
  • The petitioner was directed to pay a cost of Rs.25,000 to the Karnataka State Legal Services Authority within two weeks.

Important Clarification

  • An adjudication order passed under Section 73(9) without issuance of notice or an opportunity of hearing is liable to be set aside, with the matter relegated to the stage of the show cause notice and the assessee's registration restored in the interim — a relief the Karnataka High Court has granted consistently where such a procedural lapse is demonstrated, even while imposing a cost as a balancing measure.

Sections Involved

  • Section 73(9), CGST/KGST Act, 2017 — adjudication order following show cause notice.
  • Section 61, CGST Act, 2017 — scrutiny of returns.
  • Section 50, CGST Act, 2017 — interest on delayed payment of tax.

Decision – In Favour of

In favour of the Assessee (registration restored and matter remanded to the show cause stage), subject to payment of cost.

Case Details

High Court of Karnataka at Bengaluru; WP No. 16269 of 2025 (T-RES); Coram: Justice Suraj Govindaraj; Order dated 02.07.2025.

Link to Download the Order

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