Facts of the Case

Following an intimation in Form GST DRC-01A, the jurisdictional officer issued a show-cause notice dated 21.12.2023 under Section 73(1) of the CGST/KGST Act, 2017 alleging discrepancies in tax liability. The petitioner did not reply, and an ex parte adjudication order dated 21.03.2024 was passed confirming a demand of Rs.11,80,656/- with interest and penalty, without granting a personal hearing. The petitioner challenged the order, also seeking to strike down Notification Nos. 9/2023-CT and 56/2023-CT (and corresponding State notifications) issued under Section 168A, extending the limitation period for adjudication.

Issues Involved

  1. Whether an ex parte Section 73 order passed without a personal hearing should be set aside and the assessee given a fresh opportunity to reply.
  2. Whether the writ court should proceed to decide the vires of the Section 168A limitation-extension notifications, given that the identical question is pending before the Supreme Court.

Petitioner's Arguments

  • The petitioner did not receive the notices, and hence could neither reply nor participate in adjudication, resulting in an ex parte order; if the order is set aside, the petitioner would file a reply and documents for fresh consideration.
  • The proceedings, initiated pursuant to the SCN, were barred by limitation under Section 73(10), and the availability of an alternative appellate remedy under Section 107 would not bar the writ petition given this jurisdictional challenge.
  • Pointed to the pending Special Leave Petition No.4240/2025 before the Supreme Court, challenging the validity of the very notifications extending limitation.

Respondent's Arguments

  • The period of limitation had been validly extended by Notification No.13/2022 and Notification Nos.9 and 56 of 2023, so the proceedings could not be said to be time-barred.

Court Order / Findings

  • Noting that the validity of the impugned notifications is seized by the Supreme Court and will have a direct bearing on the impugned proceedings, the Court held that one more opportunity ought to be granted to the petitioner, to avoid multiplicity of proceedings and conflicting orders.
  • The impugned order dated 21.03.2024 was set aside, and the matter remitted for reconsideration and a fresh adjudication order only after the Supreme Court disposes of SLP No.4240/2025.
  • The period between the date of the impugned order and the Supreme Court's disposal of the SLP was excluded for the purpose of limitation.

Important Clarification

  • Where the validity of the Section 168A notifications extending the Section 73/74 limitation period is pending before the Supreme Court, High Courts may set aside an ex parte order passed under the extended limitation and defer fresh adjudication until the Supreme Court rules, rather than deciding the vires question themselves or letting the ex parte order stand.
  • This approach avoids the risk of the fresh order itself becoming vulnerable depending on the eventual Supreme Court ruling on the notifications.

Sections Involved

  • Section 73, CGST/KGST Act, 2017 — determination of tax, including the sub-section (10) limitation period.
  • Section 168A, CGST Act, 2017 — power to extend time limits, under which Notification Nos. 9 and 56 of 2023 were issued.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the ex parte order was set aside, with fresh adjudication deferred pending the Supreme Court's ruling on the Section 168A notifications.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 37041 of 2025 (T-RES)
Neutral Citation: 2025:KHC:52210
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Order: 10th December, 2025

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