Karnataka HC Sets Aside ₹1.13 Crore GST Order as SCN Was Not Served/Emailed

Paxal Fuel Corporation Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)

The Karnataka High Court partly allowed a writ petition challenging an adjudication order dated 23.12.2025 passed under Section 73(9) of the Central Goods and Services Tax Act, 2017. The petitioner contended that although the order stated that the Show Cause Notice (SCN) had been sent to its registered email address, the notice was neither sent to that email address before the adjudication nor made available on the portal until after the order was passed.

The State submitted that the Assessing Officer had also recorded unsuccessful attempts to contact the petitioner through known telephone numbers. The Court observed that the adjudication order was essentially based on the petitioner’s failure to respond to the SCN, while the petitioner consistently asserted that the SCN had not been served through its registered email.

Holding that the petitioner must be afforded a real opportunity to respond before being subjected to a demand of more than Rs.1,13,40,548 towards tax, interest, and penalty, the Court quashed the adjudication order. The proceedings were restored to the Assessing Officer, with liberty granted to the petitioner to file a detailed response to the SCN by 06.07.2026, leaving all issues open for fresh consideration.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The petitioner has called in question the Order of Adjudication dated 23.12.2025 under Section 73[9] of the Central Goods and Services Tax Act, 2017 [for short, ‘the Act’] on the ground that it has not been served with the Show Cause Notice though the Order refers to the Show Cause Notice being sent to the registered e-mail ID. Sri Y C Shivakumar, the learned counsel for the petitioner, and Sri K Hemakumar, the learned Additional Government Advocate, who accepts notice for the respondents, are heard.

Sri Y C Shivakumar submits that though the impugned order refers to the Show Cause Notice being sent to the registered e-mail ID, the petitioner is categorical in stating that this notice is not addressed to the petitioner’s e-mail ID prior to the date of the Order of adjudication and it is uploaded on the portal only after the said Order with Sri K Hemakumar pointing out that the Assessing Officer has also recorded that the efforts to communicate through the known telephone numbers have been futile.

This Court is inclined to interfere with the Order of Adjudication because the adjudication is essentially on the ground that the petitioner has not responded to the Show Cause Notice without reasoning otherwise with the petitioner asserting that the Show Cause Notice was not sent to the registered e-mail ID. This Court must observe that the petitioner must have a real opportunity before being called upon to answer the demand including tax, interest, and penalty in excess of Rs.1,13,40,548/-. Hence the following:

ORDER

a. The petition is allowed in part.

b. The Order of Adjudication dated 23.12.2025 [Annexure-A] is quashed restoring the proceedings to the respondent for due consideration reserving liberty to the petitioner to file a detailed response to the Show Cause Notice dated 29.09.2025 by 06.07.2026 leaving open all questions for due consideration.