Case Law Details
Bhoo Developers Vs DCIT (Karnataka High Court)
The petitioner challenged an order passed under Section 73(9) of the KGST Act, 2017, where adjudication proceedings resulted in a demand based on audit findings relating to non-payment of GST and development charges to the landowner. The authority had noted that despite multiple opportunities, the petitioner failed to respond to the show cause notice and proceeded to confirm the demand accordingly.
The petitioner submitted that the failure to reply was due to bona fide lapses and requested an opportunity to respond, citing potential financial prejudice if the order remained in force. The respondent contended that the show cause notice had been duly served and that the petitioner was responsible for not participating in the proceedings.
Upon reviewing the matter, the High Court observed that proper adjudication required consideration of both legal and factual aspects, which necessitated a response from the petitioner. Taking note of the circumstances, the Court held that an opportunity to reply could be granted, subject to conditions.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has called in question the validity of the order at Annexure-A, whereby the authority has completed adjudication proceedings under Section 73(9) of the KGST Act, 2017 and raised a demand.
2. The learned counsel for the petitioner submits that the petitioner did not make out reply to the show cause notice due to bonafide lapses. It is submitted that in light of serious financial prejudice that would be caused if the order is allowed to stand, the petitioner may be granted an opportunity of reply to the show cause notice and accordingly matter may be remitted back by putting the petitioner on terms.
3. The learned Additional Government Advocate Sri K. Hema Kumar would submit that the show cause notice was in fact served and the petitioner is solely responsible for not having participated in the proceedings.
4. Perused the order at Annexure-A. The authority has taken note of the audit finding and recorded finding regarding non-payment of GST and development charges to the land owner. The authority has noticed that despite several opportunities, the petitioner has not made out any reply to the show cause notice and accordingly has proceeded to confirm the grounds raised in the show cause notice.
5. Taking note of the nature of issue, the proper adjudication of which requires a response touching legal and factual aspects, the request of the petitioner for an opportunity may be considered by putting the petitioner on terms. The order at Annexure-A is set aside. The matter is remitted providing an opportunity to the petitioner to make a reply to the show cause notice. The petitioner is put on terms by directing the petitioner to deposit 10% of the tax demanded. The petitioner to appear before respondent No.1 without notice on 25.05.2026. All contentions on merits are kept open. The deposit to be paid by the next date of hearing.
6. Accordingly, the petition is disposed of.
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