Case Law Details
Breakbounce India Pvt. Ltd. Vs Commissioner of Commercial Taxes (Karnataka High Court)
In Breakbounce India Pvt. Ltd. Vs Commissioner of Commercial Taxes, the Karnataka High Court set aside an ex-parte GST adjudication order dated 21.11.2023 and the subsequent recovery proceedings due to the lack of a proper hearing opportunity as mandated by Section 75(4) of the CGST Act. The petitioner argued that the adjudication was completed without considering the documents they had submitted and without proper notice, which was claimed to have been sent via email but not adequately received. The court noted that despite the sufficiency of electronic notice, the substantial rights involved necessitated a hearing opportunity. Emphasizing the objective of Section 75(4), the court remanded the matter, allowing the petitioner to respond to the show cause notice dated 27.09.2023 within four weeks from the receipt of the court order. The court set aside the initial order and the recovery proceedings, ensuring the petitioner could participate in the adjudication process and make their case without raising limitations issues. All contentions were kept open for further consideration.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Petitioner has challenged the adjudication order dated 21.11.2023 and Summary of the order dated 21.11.2023 issued by the 2nd respondent at Annexure-A, as well as the consequential recovery proceedings initiated by the 2nd respondent.
2. It is the case of the petitioner that the 2nd respondent on the basis of the audit report, had directed the petitioner to discharge the tax dues with interest. Petitioner, it is stated at the initial stage on receipt of audit report had submitted the audited balance sheet and other books. It is submitted that without considering such documents submitted by the petitioner, adjudication has been completed without proper notice to the petitioner. It is also submitted that the notice is stated to have been served through email, but however, due to bonafide reasons petitioner was not aware and accordingly, it is stated that another opportunity may be granted taking note of the objective of Section 75(4) of the Karnataka Goods and Services Tax Act, 2017 and the ex-parte proceedings may be set aside with liberty to the petitioner to participate in the adjudicating process.
3. K. Hemakumar, learned Additional Government Advocate submits that sufficient opportunity is granted as is required under law and the contention of the petitioner that he was not aware of the notice dispatched and communicated through email, is by itself is not a sufficient reason.
4. Heard both sides.
5. It is noticed that the order passed is an ex-parte order without the say of the petitioner. Though the electronic mode of service may be sufficient, however, in the peculiar facts of this case, taking note of the substantive rights involved, it would serve the interest of justice by remanding the matter and granting another opportunity to the petitioner to participate and make out his reply to the show cause notice dated 27.09.2023. If the objective of Section 75(4) of the Act is kept in mind, requirement is of providing an opportunity wherever adverse order is sought to be passed.
6. Taking note of such legal mandate, it would be appropriate to permit the petitioner to participate in the adjudication process and accordingly, the order at Annexure-A is set aside. Consequential recovery proceedings initiated by the 2nd respondent at Annexure-B also stands set aside. The matter is restored to the stage of show cause notice. Petitioner is permitted to make out his reply to the show cause notice within a period of four weeks from receipt of certified copy of the order and question of raising any ground on limitation would not arise. All contentions are kept open.
7. Accordingly, petition is disposed off.
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