Medizen Labs Private Limited Vs Assistant Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court considered a writ petition challenging an order-in-original passed under Section 73 of the Central Goods and Services Tax Act, along with consequential recovery proceedings reflected in Form GST DRC-13. The petitioner sought setting aside of the order and refund of ₹60,60,770 recovered from its bank account. The petitioner contended that the order had been passed without submitting any reply to the show cause notice due to a bona fide lapse, resulting in non-participation in the proceedings. It was submitted that the issues raised in the notice—relating to short payment of tax, discrepancies between GSTR-1 and GSTR-3B, excess input tax credit, and unpaid tax liabilities—could be satisfactorily explained if an opportunity was granted.
The petitioner further argued that since a substantial amount had already been recovered pursuant to the impugned order, it should be allowed to present its case by filing a reply to the show cause notice. The revenue, however, contended that the lapse was attributable solely to the petitioner and that it must bear the consequences of not participating in the proceedings.
Upon examining the record, the Court noted that the order-in-original had indeed been passed without the benefit of any reply from the petitioner. It also acknowledged that a significant sum had been recovered based on the impugned order. Taking into account the petitioner’s contention that it possessed material to address the issues raised and considering the recovery already effected, the Court found it appropriate to grant an opportunity to the petitioner to present its case on merits.
