M/S Manish Enterprises vs. Union Of INDIA

Heard learned counsel for the petitioner and learned counsel for the respondent Nos.1 to 3 and learned AGA for respondent No.4 and perused the material on record.

A perusal of material on record will indicate that pursuant to an Intimation at Annexure-C in Form DRC-01A dated 18.12.2023, the respondent No.4 issued a show-cause notice dated 27.12.2023 under Section 73(1) of the CGST/KGST Act, 2017 alleging that there was short-declaration of output tax liability. Further, respondent No.4 issued reminder dated 02.01.2024 to submit documents. Subsequently, the respondent No.4 passed an adjudication order dated 28.03.2024 under Sections 73(9)/74(9) r/w Sections 75, 122 and 50 of the KGST Act confirming a total demand of Rs.26,08,470/- along with interest of Rs.5,30,224/- and a penalty of Rs.2,60,847/-, without granting an opportunity of personal hearing to the petitioner. Aggrieved by which, the petitioner is before this Court by way of the present petition. HC-KAR NC: 2025:KHC:41787

In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that petitioner has filed a response to pre-intimation notice stating that he was unwell and due to Covid and due to non-payment of dues by the suppliers, he was unable to pay the tax and file the returns and thus, his registration was cancelled suo-moto in January, 2020 which disabled him to upload the requisite information and hence, petitioner could not submit replies/ documents to neither the pre-intimation notice nor the show-cause notice under section 73(1) of the CGST/KGST Act, 2017 and resultantly couldn’t contest the proceedings. Respondent No.4 has proceeded to pass the impugned ex-parte order, which is violative of the principles of natural justice and the same deserves to be set aside and the respondent No.4 may be directed to pass fresh order after granting an opportunity of personal hearing to the petitioner. It is further submitted that the impugned proceedings initiated pursuant to the impugned show cause notice dated 27.03.2023 is barred by limitation under Section 73(10) of the KGST Act and as such, the availability of equivalent, efficacious and alternative remedy by way of filing of an appeal under Section HC-KAR NC: 2025:KHC:41787 107 of the CGST / KGST Act would not come in the way of the petitioner prosecuting the present petition.

Per contra, learned HCGP for the respondents – revenue submits that the period of limitation has been extended by the respondents vide Notification No.13/2022 dated 05.07.2022, Notification Nos.9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively and as such, it cannot be said that the proceedings are barred by limitation.

Learned counsel for the petitioner would invite my attention to the Petition in Special Leave Appeal (C) No. 4240/2025 pending before the Apex Court in order to contend that the validity of the said Notifications are seized by the Apex Court and pending adjudication before the Hon’ble Supreme Court.

In view of the aforesaid facts and circumstances and the submissions made by both sides which will indicate that the validity of the aforesaid Notifications are seized by the Apex Court and which will have an impact / bearing on the impugned proceedings, I am of the view that one more opportunity is required to be granted in favour of the petitioner by setting aside the impugned HC-KAR NC: 2025:KHC:41787 adjudication order and remitting the matter back to the respondents for reconsideration afresh in accordance with law by issuing certain directions.

Under these circumstances, in order to avoid multiplicity of proceedings and to ensure that there are no conflicting orders, I deem it just and appropriate to direct the respondent No.4 to reconsider the matter afresh and pass a fresh adjudication order in accordance with law after disposal of Special Leave to Appeal (C) No.4240/2025 by the Apex Court.

In the result, I pass the following:- ORDER