Case Law Details
B S Burraq Alumin Alloys Vs Commissioner Central Tax GST Commissionerate (Karnataka High Court)
The petitioner challenged the order-in-original passed by the adjudicating authority, which held that the taxpayer had wrongly availed input tax credit. The authority noted that the petitioner failed to submit a reply to the show cause notice and proceeded to decide the matter based on available records, resulting in an ex-parte order.
The petitioner subsequently filed an appeal. Although an opportunity for personal hearing was provided during appellate proceedings, the petitioner did not avail of it. As a result, the appellate authority upheld the original order, observing that no documentary evidence had been furnished to establish the bona fides of the petitioner’s claim.
Before the High Court, the petitioner contended that since the original order itself was passed ex-parte, the petitioner was unable to effectively substantiate its case during the appeal. It was argued that absence from earlier proceedings should be condoned and the matter should be remitted to the stage of replying to the show cause notice. The petitioner further submitted that remanding the matter only to the appellate authority would serve no purpose unless an opportunity was provided before the assessing authority.
The Revenue opposed the plea, contending that the petitioner had not been diligent in pursuing the proceedings and should be subjected to conditions if relief was granted. The petitioner, however, pointed out that an amount of Rs.32,40,896/- had already been deposited pursuant to the ex-parte order.
The High Court observed that both the original and appellate proceedings were effectively ex-parte due to the petitioner’s non-participation. Considering this, the Court found it appropriate to set aside both the order-in-original and the appellate order. The matter was remitted to the stage of replying to the show cause notice before the assessing authority.
The Court directed that the amount already deposited would be subject to the outcome of fresh adjudication. The petitioner was instructed to appear before the concerned authority on 22.04.2026 without further notice. All contentions were kept open, and the petition was disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Petitioner has challenged the order passed by respondent No.1 at Annexure-A which is the order-in-original, whereby the Authority has adjudicated the case observing that the taxpayer failed to make out reply to the show cause notice and proceeded to complete the adjudication on the basis of records and material available. The authority has recorded a finding regarding wrongful availment of input tax credit.
2. Petitioner submits that the said order was taken up before the appellate authority and in the appeal proceedings, though an opportunity of personal hearing was provided, petitioner not having availed of the same, the Authority was constrained to record a finding that the order in original does not require interference. The appellate authority has reiterated that no documentary evidence was furnished to establish the bonafide of the claim of the petitioner.
3. Learned counsel for the petitioner submits that as the order in original itself is an ex-parte order, petitioner was unable to substantiate in appeal proceedings and requests that petitioner’s absence of participation in the proceedings before the assessing authority may be condoned and the matter be remitted for fresh consideration. It is further submitted that the appellate authority confirms the order-in-original and unless the petitioner is granted an opportunity before the assessing officer to make out reply to the show cause notice, there would be no purpose served by remitting the matter merely to the appellate authority.
4. Accordingly, it is submitted that the order in original as well as the order of the appellate authority be set aside and the matter be remitted to the stage of reply to the show cause notice.
5. Learned counsel appearing for the Revenue would submit that the petitioner is not diligent in prosecuting the proceedings and that the petitioner needs to be put on terms if the matter is to be remitted.
6. Learned counsel for the petitioner submits that an amount of Rs.32,40,896/- has already been remitted pursuant to the ex-parte order and the said amount deposited may be taken note of.
7. In light of the order-in-original being an ex-parte order and also noticing that before the appellate authority also, in effect the proceedings were ex-parte due to non-participation of the petitioner at the subsequent stages, it would be appropriate to set aside the impugned orders.
8. Accordingly, the orders Annexures-A and B are set aside and the matter is remitted to the stage of reply to the show cause notice before the assessing authority. The amount of Rs.32,40,896/- paid pursuant to the impugned orders, shall be subject to the result of adjudication.
9. Petitioner to appear before respondent No.3 without further notice on 22.04.2026. All contentions are kept open.
10. Accordingly, petition is disposed of.
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