SDB Infrastructures Vs State of Karnataka (Karnataka High Court)
The petitioner challenged an adjudication order dated 29.01.2025 and a corresponding summary order and recovery notice issued under the CGST/KGST Act, 2017. The respondent had issued a show-cause notice on 23.11.2024 following a final audit report dated 14.11.2024, alleging various discrepancies. As the petitioner failed to reply, the authority passed an ex-parte order under Section 73(9), confirming a total demand of Rs. 28,05,004/-.
The petitioner argued that its business had shut down, causing the respondent’s emails and notices to go unnoticed, resulting in its inability to submit replies or documents. It contended that the omission was due to bona fide reasons and unavoidable circumstances, and sought a fresh opportunity to contest the proceedings. The respondent opposed the petition.
The Court noted the petitioner’s explanation that the non-submission of replies occurred due to the shutdown of business and that the failure to contest the proceedings was unintentional. Accepting this as a bona fide reason, the Court adopted a justice-oriented approach and set aside the ex-parte order of 29.01.2025. The matter was remitted to the respondent for fresh consideration from the stage of reply to the show-cause notice dated 23.11.2024.
The Court allowed the petition subject to the petitioner depositing Rs. 15,000/- with the Karnataka High Court Legal Services Authority within six weeks. The petitioner was directed to appear before the respondent on 18.11.2025, with liberty to submit all relevant replies and documents. The authority was directed to provide reasonable opportunity and proceed according to law. The Court clarified that failure to appear on the specified date would result in automatic recall of the present order.
