M/S Md Engineers vs. Assistant Commissioner
Original PDF →Facts
The petitioner challenged an ex-parte adjudication order passed under Section 73 of the Act for the tax period 2021-22, which arose from an alleged mismatch in GSTR-3B and GSTR-2A returns. The proprietor claimed personal tragedy and health issues prevented him from responding to the show cause notice.
Held
The High Court found the petitioner's reasons for non-appearance bona fide and quashed the ex-parte adjudication order. It restored the proceedings to the first respondent, granting the petitioner an opportunity to file a response and additional documents.
Key Issues
Whether an ex-parte adjudication order should be set aside when the taxpayer demonstrates bona fide reasons for failing to respond to the show cause notice, allowing an opportunity to present their case on the alleged tax mismatch.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner, a proprietary concern and a registered taxpayer under the Karnataka Goods and Services Tax Act, 2017 [for short, ‘the Act’], has called in question the Adjudication Order dated 04.09.2025 [Annexure-A] under Section 73 of the Act read with the relevant Rules. The impugned order is an ex parte order, and the proceedings are begun with the intimation in Form GST DRC-01A on 27.06.2025 and are concluded after the Show Cause Notice dated 19.07.2025. Sri E I Sanmathi, the learned counsel for the petitioner, submits that the petitioner seeks interference by this Court under Article 226 of the Constitution of India requesting for an additional opportunity because the petitioner's proprietor lost his wife in the year 2022, and even as a 47-year-old, he has health conditions which required him to be under constant medical care when the Show Cause HC-KAR NC: 2026:KHC:28540 Notice is issued and the proceedings are conducted for the impugned Adjudication Order. The learned counsel relies upon the medical records that are produced. On merits, Sri E I Sanmathi submits that the proceedings are because of an alleged mismatch in the Returns filed in GSTR-3B and GSTR-2A, but the petitioner will ensure evidence is produced to explain the mismatch as would be permissible under the relevant Circular.
Sri K Hema Kumar, a learned Additional Government Advocate, who is called upon to accept notice for the respondents, is heard in the light of these circumstances. This Court is of the view that the petitioner is bona fide in showing cause against the failure to respond to the Intimation/Show Cause Notice and participate in the proceedings resulting in the impugned Adjudication Order. The petitioner must have an opportunity to explain the difference in HC-KAR NC: 2026:KHC:28540 the documents as would be permissible. Hence the following: ORDER [a] The petition is allowed. [b] The Adjudication Order dated 04.09.2025 [Annexure-A] is quashed restoring the proceedings to the first respondent with liberty to the petitioner to file its response and additional documents with the first respondent by 13.07.2026. (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.