M/S Baseerath Enterprises vs. The Assistant Commissioner Of Commercial Taxes
Original PDF →Facts
The petitioner challenged an ex-parte adjudication order, which determined an Input Tax Credit mismatch based on GSTR-3B and GSTR-2A, and a subsequent appellate order that rejected the appeal on grounds of limitation. The petitioner contended that no independent verification was done and they were not given an opportunity to produce documents.
Held
The High Court quashed both the appellate order and the adjudication order, restoring the matter to the first respondent. It directed the petitioner to submit documents proving the genuineness of transactions, which the first respondent must consider before passing a fresh reasoned order.
Key Issues
The key issues were whether the ex-parte adjudication order, based solely on GSTR-3B and GSTR-2A mismatch, was valid without independent verification, and if the appellate authority correctly rejected the appeal on limitation grounds when the adjudication order was ex-parte.
Sections Cited
Section 73(9), Section 75(3), Section 73(5), Rule 142(1)(a)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER PASSED UNDER SECTION 73(9) OF THE CGST/KGST ACT, 2017 IN FORM GST DRC-07 BEARING REFERENCE NO. ACCT/LGSTO - 495/BLI/DRC-07/2024-25/T.NO.834 DATED 22.04.2024 PASSED BY THE RESPONDENT NO. 1, PRODUCED AT ANNEXURE-A. B) QUASHING THE APPELLATE ORDER PASSED BY THE RESPONDENT NO.2 IN APPEAL NO. KGST/AP-679/2024-25 DATED 19.02.2026, PRODUCED AT ANNEXURE-B. C) CONSEQUENTLY REMAND THE MATTER TO THE RESPONDENT NO.1 FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW AFTER AFFORDING REASONABLE OPPORTUNITY TO THE PETITIONER AND AFTER CONSIDERING THE DOCUMENTS PRODUCED BY THE PETITIONER IN TERMS OF CIRCULAR NO.183/15/2022-GST AND OTHER SUPPORTING RECORDS RELATING TO THE DISPUTED INPUT TAX CREDIT.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD HC-KAR NC: 2026:KHC:35801 ORAL ORDER The petitioner is aggrieved by [i] the Order-in- Appeal dated 19.02.2026 [Annexure-B] rejecting the petitioner’s appeal in No. KGST/AP-679/2024-25 and [ii] the Adjudication Order dated 22.04.2024 [Annexure-A]. These impugned orders are for the tax period 2018-19. The Adjudication Order is premised in the assertion that the Show Cause Notice is issued to the petitioner, but it has filed no response.
Sri Manoj S N, the learned counsel for the petitioner, submits that the proceedings are concluded because of a mismatch between Forms GSTR-3B and GSTR-2A and the excess availment of Input Tax Credit and are ex-parte. The learned counsel invites this Court’s attention to the following assertion in the memorandum of petition. “The petitioner humbly submits that the impugned adjudication order has been passed virtually ex parte and solely on the basis of portal-generated mismatch between GSTR-3B and GSTR-2A. The Respondent HC-KAR NC: 2026:KHC:35801 No.1 has not undertaken any independent verification of the underlying transactions nor examined the tax invoices, books of accounts, payment particulars or other supporting records pertaining to the transactions in question”.
Sri Manoj S N also submits that the Board Circulars dated 27.12.2022 and 17.07.2023 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 Hemakumar, 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 Show Cause Notice in GST DRC- HC-KAR NC: 2026:KHC:35801 01 dated 04.12.2023 and the opportunity being granted in the following terms: “….An intimation of tax ascertained as being payable under Section 75(3) in DRC- 01A having details as above was issued on 17.04.2023 and also served to you through registered Mail ID and also by post, providing the 15 days to reply for the taxpayer in Part-B.
Even to the above intimation, you have neither responded nor filed any explanations even as on this date or not discharged liabilities voluntarily u/s 73(5) of GST Act 2017 in DRC-03/ Hence, the show cause notice, DRC-01 issued on 04.12.2023 u/s 73 of the GST Act, 2017, read with rule 142(1)(a) and also served to you through register Mail ID and also by post, providing the 30 days to reply for the taxpayer in DRC-06.”
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. HC-KAR NC: 2026:KHC:35801 KGST/AP-679/2024-25 is filed after the statutory limit of three months, 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 of the Board Circulars. The circumstances asserted by the petitioner persuade this Court to opine that the petitioner must have another opportunity. Hence, the following.
ORDER
The petition is allowed and the Order of rejection of the Appeal dated 19.02.2026 [Annexure-B], and the Adjudication Order dated 22.04.2024 [Annexure-A] are quashed subject to the following terms. HC-KAR NC: 2026:KHC:35801 [a] The proceedings are restored to the first respondent for due consideration. [b] The petitioner is permitted to file, along with the certified copy of this order, the copies of the documents to show the genuineness of the transactions. [c] 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.