Facts of the Case

Shri Kalyanam Jayadeep, proprietor of M/s Varasiddivinayaka Stone Crusher (GSTIN 29ASDPJ5430A1Z6), challenged a chain of proceedings issued by State GST authorities: a pre-intimation notice dated 12.11.2024 under Section 73(5) in Form DRC-01A, a show-cause notice dated 20.11.2024 under Section 73(1) in Form DRC-01, and the resultant Order-in-Original dated 27.02.2025 under Section 73(9) confirming a demand of Rs.19,57,657 (tax, interest and penalty). The petitioner did not respond to any of the notices, claiming non-receipt, and separately contended that since his GSTIN was under the exclusive administrative control of the Central GST authorities, the State GST officer had no jurisdiction to initiate or complete the proceedings, being beyond the cross-empowerment framework of Section 6.

Issues Involved

  1. Whether the ex-parte demand order should be set aside for want of a genuine opportunity to reply.
  2. Whether proceedings initiated by a State GST officer against an assessee administratively assigned to Central GST authorities are without jurisdiction under Section 6 of the CGST/KGST Act.

Petitioner's Arguments

  • Non-receipt of the pre-intimation notice and show-cause notice was due to bona fide reasons and unavoidable circumstances; one more opportunity would allow a proper reply to be filed.
  • The proceedings by the State officer were without jurisdiction as the petitioner's registration lay under exclusive Central administrative control and the case was not based on any intelligence-based enforcement action.

Respondent's Arguments

  • There was no merit in the petition and it was liable to be dismissed.

Court Order / Findings

  • The Court adopted a "justice-oriented approach", holding the assertion of bona fide inability to reply sufficient to warrant one further opportunity.
  • The Order-in-Original dated 27.02.2025 was set aside subject to the petitioner paying Rs.10,000 cost to the High Court Legal Services Authority.
  • The matter was remitted to the stage of filing a reply to the show-cause notice dated 20.11.2024, with the petitioner directed to appear on 19.01.2026 without further notice, failing which the order would stand automatically recalled.
  • The jurisdictional/cross-empowerment challenge was not separately adjudicated on merits.

Important Clarification

  • Courts continue to grant a conditional "one more opportunity" remedy in ex-parte GST assessments where non-receipt of notices is plausibly explained, typically coupled with a cost payment.
  • A jurisdictional challenge premised on cross-empowerment under Section 6 remains available to be argued afresh; its mere mention in a writ petition does not amount to a decision on the point.

Sections Involved

  • Section 73 of the CGST/KGST Act, 2017 — demand and adjudication for tax short-paid/not paid.
  • Section 6 of the CGST/KGST Act, 2017 — cross-empowerment between Central and State tax authorities.

Decision – In Favour of

In favour of the Assessee — the ex-parte demand order was set aside on cost and the matter remitted for a fresh reply and hearing; the jurisdiction plea was left open.

Case Details

Court: High Court of Karnataka at Bengaluru — Case No.: Writ Petition No. 36614 of 2025 (T-RES) — Neutral Citation: 2025:KHC:51898 — Coram: Hon'ble Justice S.R. Krishna Kumar — Date of Order: 9 December 2025.

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