Shri Satish H E vs. The Assistant Commissioner Of Commercial Taxes Lgsto-215
Original PDF →Facts
The petitioner challenged a show cause notice and an adjudication order issued under Section 73 of the CGST/KGST Act, 2017, which alleged under-declaration of outward supply based on third-party data. The petitioner contended that they had not received the show cause notice and were denied an opportunity to respond and present evidence.
Held
The High Court quashed the adjudication order, allowing the petition and restoring the proceedings to the first respondent. The petitioner was granted an opportunity to file a response to the show cause notice and submit supporting documents, subject to payment of 10% of the tax in demand, for a fresh consideration.
Key Issues
The key legal issues were whether the adjudication order was validly passed without affording the petitioner an opportunity to respond to the show cause notice, and the reliance on third-party data without allowing the petitioner to present contradictory evidence.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER OR DIRECTION REMANDING THE MATTER TO RESPONDENT NO.1 TO THE STAGE OF REPLY TO THE SHOW CAUSE NOTICE, LEAVING ALL RIGHTS AND CONTENTIONS OF THE PARTIES EXPRESSLY OPEN, AND THEREAFTER DIRECT RESPONDENT NO.1 TO PROCEED AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING THE PETITIONER A FULL, FAIR AND EFFECTIVE OPPORTUNITY OF FILING OBJECTIONS AND BEING HEARD IN THE MATTER.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD HC-KAR NC: 2026:KHC:33980 ORAL ORDER
The petitioner's grievance is with the Show Cause Notice dated 21.11.2024 [Annexure-C] and Adjudication Order dated 17.02.2025 [Annexure-E]. This Adjudication Order is under Section 73 of the Karnataka Goods and Services Tax Act, 2017/Central Goods and Services Tax Act, 2017 [for short, ‘the KGST/CGST Act’]. The proceedings are commenced upon verification of data from a third-party website/portal viz., MGNREGA alleging that the petitioner has under-declared the outward supply. The impugned Order refers to the petitioner being served with both the Intimation in Form GST DRC – 01A and the Show Cause Notice in Form GST DRC – 01, but the petitioner has not responded to the same.
Sri Ajay Kumar N., the learned counsel for the petitioner, invites this Court's attention to the terms of the Adjudication Order to contend that though the Adjudicating Officer has referred to the Intimation HC-KAR NC: 2026:KHC:33980 and the Show Cause Notice being delivered to the petitioner both through post and email, the petitioner has not received the same. The learned counsel argues that no proceedings could have been initiated based on the details available on a third-party website/portal, and that even otherwise the petitioner, based on the invoices available, can demonstrate that the values as mentioned in the show cause notice are wrong.
Sri K. Hema Kumar, the learned Additional Government Advocate who is called upon to accept notice for the respondents, is heard. This Court opines that if the Adjudicating Officer has to justify the conclusion of the proceedings based on the data available on a third-party website/portal, the Adjudicating Officer must also consider whether the petitioner can produce invoices to show that the values are wrongly mentioned both in the Intimation and the Show Cause Notice. However, the petitioner, HC-KAR NC: 2026:KHC:33980 who proposes to show cause against the commencement of proceedings but has not denied service of show cause notice by email, must be put on terms. In the light of the afore, the following: ORDER The petition is allowed and the Adjudication Order dated 17.02.2025 [Annexure-E] is quashed subject to payment of 10% of the tax in demand and in the following terms. [A] The proceedings are restored to the first respondent with opportunity to the petitioner to file response to the Show Cause Notice dated 21.11.2024 [Annexure-C].
[B] The petitioner is permitted to file, along with the certified HC-KAR NC: 2026:KHC:33980 copy of this Order, the copies of the documents to show cause against the commencement of proceedings.
[C] The petitioner shall file such response and documents by 20.08.2026 and the first respondent shall consider these documents and then conclude the proceedings by a reasoned order. (B M SHYAM PRASAD) JUDGE
SA Ct:sr
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.