SCN not served, GST Registration Cancelled: Karnataka HC Sets Aside Order

Ebix Smartclass Educational Services Pvt. Ltd. Vs Commercial Tax Officer (Karnataka High Court)

Ebix Smartclass Educational Services Pvt. Ltd. approached the Karnataka High Court challenging an adjudication order and related notices issued by the Commercial Tax Officer for the financial year 2018-19. The petitioner had voluntarily canceled its GST registration in June 2022 due to discontinued business activities. However, a show-cause notice was issued via email in December 2023, which the petitioner did not access as its business operations had ceased. An ex-parte assessment order followed in February 2024, and the petitioner only became aware of it in October 2024 when checking the GST portal. The petitioner argued that it had no opportunity to respond to the notice and sought a chance to present its case.

The court noted that the petitioner had not been served the show-cause notice effectively due to the canceled registration. Acknowledging the procedural lapse, the High Court set aside the assessment and demand orders and remanded the case to the Adjudicating Authority. The petitioner was granted two weeks to file a reply, with a hearing scheduled on January 23, 2025. The authorities were directed to proceed per legal procedures, ensuring the petitioner’s right to be heard. The writ petition was allowed, and the related endorsements were quashed.