King Enterprise Vs Assistant Commissioner of Commercial Taxes (Audit) (Karnataka High Court)
Summary: The petitioner, M/S. King Enterprise, a registered proprietorship concern engaged in ferrous waste and scrap trade, including remelting scrap ingots of iron or steel, challenged the adjudication order dated 29.04.2026 and the corresponding summary order in Form GST DRC-07. The adjudication officer had determined tax as well as penalty at Rs.91,00,384/- and provided that payment of tax, interest and reduced penalty of 50% within thirty days would conclude the proceedings, failing which the full 100% penalty would become payable. The order also stated that penalty equivalent to 100% of the tax liability would apply under each Act if the tax and interest were not paid within the prescribed period under Section 74(9) of the GST Act, 2017.
The petitioner stated that a show cause notice in Form GST DRC-01 dated 09.12.2025 proposed reversal of Input Tax Credit. According to the petitioner, the show cause notice, reminders and communications fixing personal hearing were uploaded only on the common GST portal. Because the petitioner’s GST consultant had changed during the relevant period and the portal communications remained unnoticed, the petitioner could not submit an effective reply or appear during adjudication. Reminders dated 13.01.2026, 06.02.2026 and 26.02.2026 were also stated to have been uploaded on the portal. The proceedings consequently proceeded ex-parte and resulted in the demand of Rs.91,00,384/-. The adjudication related to the period April 2023 to March 2024.
