Arunagiri Imports And Exports Private Limited Vs State of Karnataka (Karnataka High Court)
Summary: The Karnataka High Court considered a writ petition filed by M/s. Arunagiri Imports and Exports Private Limited challenging an adjudication order dated 13.08.2024 passed under Section 73(9) of the Karnataka Goods and Service Tax Act, 2017. The petitioner also sought setting aside of the demand raised pursuant to the impugned order. The proceedings concerned the tax period 2019-20.
The petitioner contended that the respondent authority had concluded the adjudicatory proceedings by passing an ex-parte order without the benefit of any reply to the show-cause notice. According to the petitioner, its business was under loss and, due to a bona-fide lapse, it could not make out a reply to the show-cause notice. The petitioner further submitted that certain recoveries had already been made pursuant to the impugned order and requested an opportunity to take a stand on merits by filing a reply to the show-cause notice.
The petitioner asserted that, if the impugned order were set aside and an opportunity were granted, it would meet the grounds raised in the show-cause notice by placing appropriate material before the adjudicating authority.
Upon perusing the adjudication order, the Court noticed that the show-cause notice had proceeded on the premise that the petitioner had not submitted documents supporting the exempted turnover declared in GSTR3B. The authorities had also noticed that no documents had been submitted in support of the declared exempted turnover. The impugned order further recorded that the petitioner had not filed any reply and had not discharged payment voluntarily.
The Court took note of the petitioner’s assertion that it would meet the grounds raised in the show-cause notice and also observed that the adjudication order was an ex-parte order. In these circumstances, the Court held that the ends of justice would be met by setting aside the adjudication order and remitting the matter to the third respondent for reconsideration from the stage of reply to the show-cause notice.
Accordingly, the Court set aside the adjudication order at Annexure-A dated 13.08.2024 and remitted the matter to the stage of reply to the show-cause notice. The petitioner was directed to make out its reply and appear before respondent No.3 without further notice on 04.05.2026. All contentions were kept open.
The Court also directed that the petitioner’s assertion regarding recovery pursuant to the impugned adjudication order be verified by the authorities. The petitioner was directed to correct the description of respondent No.3 in the cause-title. The writ petition was accordingly disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has filed the present petition seeking for setting aside the order at Annexure-A dated 13.08.2024 passed under Section 73(9) of the Karnataka Goods and Service Tax Act, 2017 (for short ‘the Act’). The petitioner has also sought for setting aside of the demand raised pursuant to the order at Annexure-A.
2. It is the case of the petitioner that the respondent authority has concluded the proceedings initiated against the petitioner by way of an adjudicatory order, which in-effect is an ex-parte order without benefit of any reply to the show-cause notice. It is submitted that the petitioner’s business was under loss and due to bona-fide lapse the petitioner was not able to make out a reply.
3. It is further submitted that there are certain recoveries pursuant to the impugned order and the petitioner may be granted an opportunity to take stand on merits by way of reply to the show-cause notice, by setting aside the impugned order and granting an opportunity. It is asserted that the petitioner would meet the grounds raised in the show-cause notice by placing appropriate material before the authority.
4. Perused the order of adjudication. It is noticed that the show-cause notice was issued on the premise that the petitioner has not submitted documents in support of the exempted turnover as declared in GSTR3B. The authorities have noticed that the petitioner has not submitted any documents in support of declared exempted turnover in GSTR3B. It is also observed in the impugned order that the petitioner has not filed any reply nor discharged payment voluntarily.
5. In light of the assertion of the petitioner that the petitioner would meet the grounds raised in the show-cause notice and observing that the order passed is an ex-parte order, it would meet the ends of justice by setting aside the order of adjudication passed under Section 73(9) of the Act dated 13.08.2024 and remitting the matter back to respondent No.3 for reconsideration from the stage of reply to show-cause notice.
6. Accordingly, the order of adjudication at Annexure-A is set aside and the matter is remitted to the stage of reply to show-cause notice. The petitioner to make out reply to the show-cause notice. The petitioner to appear before respondent No.3 without further notice on 04.05.2026. All contentions are kept open.
7. The assertion of the petitioner that there has been recovery pursuant to the impugned order of adjudication, such matter to be verified by the authorities. The petitioner to correct the description of respondent No.3 in the cause-title.
Accordingly, petition is disposed of.
