Case Law Details
MD Engineers Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
The Karnataka High Court allowed the writ petition and quashed the ex parte adjudication order dated 20.06.2024 passed under Section 73 of the Karnataka Goods and Services Tax Act, 2017. The proceedings had commenced with Form GST DRC-01A dated 01.02.2024 and a Show Cause Notice dated 22.03.2024. The petitioner sought an additional opportunity, stating that the proprietor could not respond to the notices due to the death of his wife in 2022 and his own health conditions requiring constant medical care, supported by medical records. The petitioner also submitted that the proceedings arose from an alleged mismatch between GSTR-3B and GSTR-2A returns and undertook to produce evidence explaining the mismatch as permissible under the relevant Circular. The High Court found the explanation for non-participation to be bona fide and held that the petitioner should be given an opportunity to explain the differences in the documents. Accordingly, the Court quashed the adjudication order, restored the proceedings to the adjudicating authority, and granted liberty to the petitioner to file its response and additional documents within the time specified by the Court.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner, a proprietary concern and a registered taxpayer under the Karnataka Goods and Services Tax Act, 2017 [for short, ‘the Act’], has called in question the Adjudication Order dated 20.06.2024 [Annexure-A] under Section 73 of the Act read with the relevant Rules. The impugned order is an ex parte order, and the proceedings are begun with the intimation in Form GST DRC-01A on 01.02.2024 and are concluded after the Show Cause Notice dated 22.03.2024.
Sri E I Sanmathi, the learned counsel for the petitioner, submits that the petitioner seeks interference by this Court under Article 226 of the Constitution of India requesting for an additional opportunity because the petitioner’s proprietor lost his wife in the year 2022, and even as a 47-year-old, he has health conditions which required him to be under constant medical care when the Show Cause Notice is issued and the proceedings are conducted for the impugned Adjudication Order. The learned counsel relies upon the medical records that are produced. On merits, Sri E I Sanmathi submits that the proceedings are because of an alleged mismatch in the Returns filed in GSTR-3B and GSTR-2A, but the petitioner will ensure evidence is produced to explain the mismatch as would be permissible under the relevant Circular.
Sri K Hema Kumar, a learned Additional Government Advocate, who is called upon to accept notice for the respondents, is heard in the light of these circumstances. This Court is of the view that the petitioner is bona fide in showing cause against the failure to respond to the Intimation/Show Cause Notice and participate in the proceedings resulting in the impugned Adjudication Order. The petitioner must have an opportunity to explain the difference in the documents as would be permissible. Hence the following:
ORDER
(a) The petition is allowed.
(b) The Adjudication Order dated 20.06.2024 [Annexure-A] is quashed restoring the proceedings to the first respondent with liberty to the petitioner to file its response and additional documents with the first respondent by 13. 07.2026.
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