M/S Kamal Cut Piece Emporium vs. Commercial Tax Officer (Audit)
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The petitioner challenged an ex-parte assessment order, a rectification order, and an appellate order, all related to a GST mismatch between GSTR-3B and GSTR-2A for the 2017-18 period. The assessment was made without the petitioner's response, and the subsequent appeal was dismissed as time-barred, being delayed by 281 days.
Held
The High Court quashed all impugned orders, finding that the petitioner was not given an adequate opportunity to present their case due to the proprietor's indisposition. The Court held that the petitioner should be allowed to produce documents to explain the mismatch, as permitted by Board Circulars, and remanded the matter for fresh consideration.
Key Issues
Whether the ex-parte assessment order passed without adequate opportunity to the taxpayer was valid, and if the appellate authority correctly dismissed the appeal solely on grounds of limitation, especially when the taxpayer claimed to have valid explanations for GSTR-3B and GSTR-2A mismatches.
Sections Cited
Sections 73(9), Section 50, Section 73(1), Rule 142(1-A), Form GST DRC-01A, Form GST DRC-01
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner is aggrieved by [i] the Order-in- Appeal dated 18.03.2026 [Annexure-D] rejecting the petitioner’s appeal in No. KGST/AP-498/2025-26 [ii] the order of rejection of application for rectification dated 11.11.2024 [Annexure-C] and [iii] the Adjudication Order dated 26.12.2023 [Annexure-B]. These impugned orders are for the period 2017-18. The Adjudication Order is premised in the assertion HC-KAR
CNR: KAHC010464672026 NC: 2026:KHC:36138 that the Show Cause Notice is issued to the petitioner, but it has filed no response.
Sri M Thirumalesh, the learned counsel for the petitioner, submits that the proceedings are concluded because of a mismatch between Forms GSTR-3B and GSTR-2A and that the petitioner could not respond to either the intimation in Form GST DRC-01A or to the Show Cause Notice in Form GST DRC-01. The learned counsel invites this Court’s attention to the following averment in the memorandum of petition. “11. The petitioner submits that it was not given adequate and sufficient opportunity to substantiate its case. The proprietor was indisposed and was not in town. Accordingly, the adjudication order has been passed without appreciating the facts.”.
Sri M Thirumalesh also submits that the Board Circulars dated 27.12.2022 and 17.07.2023 HC-KAR
CNR: KAHC010464672026 NC: 2026:KHC:36138 are issued covering the subject tax period which envisage an opportunity to a Registered Taxable Person [RTP] to produce documents to establish the genuineness of the transactions even if those are not declared by the supplier.
Sri K Hema Kumar, a learned Additional Government Advocate for the respondents, is heard for the disposal of the petition examining whether the petitioner must be extended another reasonable opportunity in view of the above. The first respondent has referred to the Intimation in GST DRC-01A dated 27.06.2023 and the opportunity being granted in the following terms: “In case, the taxable person wish to file any submissions/reply against the above ascertainment, the same may be furnished on or before 7 days in PART-B of DRC-01A In response to the said intimation in FORM DRC-01A dated 27.06.2023 and also contacted through phone calls, but the Taxpayer has not filed any reply/objections. HC-KAR
CNR: KAHC010464672026 NC: 2026:KHC:36138 In view of the above, the Undersigned has proceeded with Show-cause notice u/s 73(1) of the KGST/CGST Act, 2017. The findings and grounds as indicated in the Intimation of Liability under section 73 of the CGST/KGST Act,2017 read with Rule 142(1- A) of the CGST/KGST Rules, 2017 dated 31.08.2023 issued through govt. Mail-ID to Registered Mail-ID of Taxable Person and Physical Copy issue to the Taxable person….”
The appeal is rejected on grounds of limitation observing that the delay beyond 120 days from the date of the Adjudication Order cannot be condoned in law. The petitioner’s appeal in No. KGST/AP-498/2025-26 is delayed by 281 days, and the petitioner asserts that because the Adjudication order is an ex-parte order, the appeal could not be filed within the time allowed. The petitioner contends that the mismatch between Forms GSTR-3B and GSTR-2A can be explained with the support of the documents, and certificates as permissible in terms HC-KAR
CNR: KAHC010464672026 NC: 2026:KHC:36138 of the Board Circulars. The circumstances asserted by the petitioner and the terms of the Circular persuade this Court to opine that the petitioner must have another opportunity. Hence, the following.
ORDER
The petition is allowed and the Adjudication Order dated 26.12.2023 [Annexure- B], the order of rejection of application for rectification dated 11.11.2024 [Annexure-C] and the Order-in-Appeal dated 18.03.2026 [Annexure-D] are quashed subject to the following terms. [i] The proceedings are restored to the first respondent for due consideration.
[ii] The petitioner is permitted to file, along with the certified copy of this order, the copies of the HC-KAR
CNR: KAHC010464672026 NC: 2026:KHC:36138 documents to show the genuineness of the transactions.
[iii] The petitioner shall produce these documents by 05.10.2026 and the first respondent shall consider these documents and then conclude the proceedings by a reasoned order. (B M SHYAM PRASAD) JUDGE
AN/-
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.