Vajra Associates vs. The Assistant Commissioner Of Commercial Taxes
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The petitioner failed to respond to a show cause notice due to auditor's mistake and personal medical condition, leading to an ex-parte adjudication order. The appeal against this order was rejected on grounds of limitation.
Held
The Court held that the petitioner should be granted another opportunity to present their case and documents, considering the circumstances and relevant board circulars.
Key Issues
Whether the petitioner should be granted an opportunity to respond to the show cause notice and present documents despite the delay and ex-parte order.
Sections Cited
Section 74
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER IN APPEAL BEARING REF. NO. ZD2904250282883 DATED 05.04.2025 PASSED BY THE R2 (ANNX-B).
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD
ORAL ORDER
The petitioner is aggrieved by [i] the Order-in- Appeal dated 05.04.2025 [A nnexure-B] rejecting the petitioner’s appeal in Ref. No. ZD2904250282883 and [ii] the Adjudication Order dated 13.08.2024 [Annexure-A]. These impugned orders are for the period April 2019 to March 2020. The Adjudication HC-KAR
CNR: KAHC010426662026 NC: 2026:KHC:36830 Order is premised in the assertion that the Show Cause Notice is issued to the petitioner, but it has filed no response.
Sri Pradyumna Hejib, the learned counsel for the petitioner, submits that the proceedings are concluded because of a mismatch between Forms GSTR-3B and GSTR-9 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. “The petitioner submits that due to the mistake of her auditor as well as her personal medical condition, she was unable to take effective steps to represent and file detailed reply to the show cause notice issued by the First Respondent. Further, the Petitioner was unaware of the passing of the Adjudication order since she was not conversant with the GST portal. Therefore, the petitioner could not HC-KAR
CNR: KAHC010426662026 NC: 2026:KHC:36830 file her statement of objections or produce any supporting documents before the First Respondent Authority.”
Sri Pradyumna Hejib 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 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 Show Cause Notice in GST DRC-01 dated 30.03.2024 and the opportunity being granted in the following terms: HC-KAR
CNR: KAHC010426662026 NC: 2026:KHC:36830 “The taxable person did not respond to the said notice. In order to give one more opportunity in the interest of natural justice, personal hearings were offered u/s. 74(4) of KGST/CGST Act, 2017 on 24.05.2024, 18.06.2024 & 12.07.2024 to clarify his objections/explanations if any. But the Tax prayer did not utilize the opportunities.”
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 is belated, and the petitioner asserts that because the Adjudication order is an ex-parte order, the appeal could not be filed within the time allowed. Crucially, the petitioner contends that the mismatch between Forms GSTR-3B and GSTR-9 can be explained with the support of the documents, The circumstances asserted by the petitioners persuade this Court to opine that the petitioner must have another opportunity, and hence, the following. HC-KAR
CNR: KAHC010426662026 NC: 2026:KHC:36830 ORDER
The petition is allowed and the Order of rejection of the Appeal dated 05.04.2025 [Annexure-B], and the Adjudication Order dated 13.08.2024 [Annexure-A] are quashed subject to the following terms. [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 response with the copies of the documents.
[c] The petitioner shall produce these documents by 15.10.2026 and the first respondent shall consider these documents and conclude HC-KAR
CNR: KAHC010426662026 NC: 2026:KHC:36830 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.