Facts of the Case

The petitioner, M/S Seema Caterers, a registered partnership represented by its partner Athaf Ulla Shariff, was issued a show cause notice dated 13.05.2024 under Section 73(1) of the CGST/KGST Act, 2017. Having received no reply, the Commercial Tax Officer proceeded to pass the impugned order dated 23.07.2024 in Form GST DRC-07 under Section 73(9) read with Sections 75, 122 and 50, confirming a total demand of Rs.1,99,03,617 including tax, interest and penalty for the year 2019-20.

Issues Involved

  1. Whether the ex-parte confirmation of a substantial GST demand ought to be set aside where the petitioner's inability to respond was attributable to the demise of its auditor.

Petitioner's Arguments

  • The petitioner's tax consultant/auditor had expired on 18.05.2021, and due to this bona fide reason and unavoidable circumstance, the petitioner could not submit its reply or contest the proceedings.
  • One further opportunity was sought to reply to the show cause notice and contest the proceedings.

Respondent's Arguments

  • The Additional Government Advocate submitted that there was no merit in the petition and that it was liable to be dismissed.

Court Order / Findings

  • Justice S.R. Krishna Kumar, having regard to the specific assertion regarding the demise of the petitioner's tax consultant and the resultant bona fide inability to contest the proceedings, deemed it appropriate to adopt a justice-oriented approach.
  • The impugned order dated 23.07.2024 was set aside and the matter remitted to the second respondent for reconsideration afresh from the stage of the petitioner submitting its reply to the show cause notice dated 13.05.2024.
  • The petitioner was directed to appear before the authority 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

  • Courts will adopt a justice-oriented approach and set aside an ex-parte GST demand order where the assessee demonstrates a bona fide, unavoidable reason — such as the demise of its tax consultant — for failure to respond to a show cause notice, provided the assessee undertakes to promptly participate on remand.

Sections Involved

  • Section 73(1) and 73(9), Central Goods and Services Tax Act, 2017 / Karnataka GST Act, 2017 — show cause notice and determination of tax not paid.
  • Section 75, CGST/KGST Act, 2017 — general provisions relating to determination of tax.
  • Section 122, CGST/KGST Act, 2017 — penalty for certain offences.
  • Section 50, CGST/KGST Act, 2017 — interest on delayed payment of tax.

Decision – In Favour of

In favour of the Assessee — the ex-parte demand order was set aside and the matter remitted to the show-cause-reply stage.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 24293 of 2024
Neutral Citation: 2025:KHC:49381
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Order: 26.11.2025

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