Karnataka High Court Quashes Ex Parte Order Under Section 73 KGST Act: Proprietor's Bereavement and Illness Held as Bona Fide Grounds
Case Overview
MD Engineers Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
The Karnataka High Court, in a significant ruling favouring a proprietary concern registered under the Karnataka Goods and Services Tax Act, 2017, allowed a writ petition challenging an ex parte adjudication order. The Court exercised its jurisdiction under Article 226 of the Constitution of India and quashed the adjudication order dated 20.06.2024, which had been passed under Section 73 of the Karnataka Goods and Services Tax Act, 2017, restoring the matter to the adjudicating authority for fresh consideration.
Background of the Case
The petitioner, MD Engineers, is a proprietary concern operating as a registered dealer under the Karnataka Goods and Services Tax Act, 2017. The dispute originated from proceedings initiated by the revenue authorities on account of an alleged mismatch between the returns filed in GSTR-3B and GSTR-2A.
The sequence of events unfolded as follows:
- An intimation was issued to the petitioner in Form GST DRC-01A on 01.02.2024
- A Show Cause Notice was subsequently issued on 22.03.2024
- The proceedings concluded with an ex parte Adjudication Order dated 20.06.2024, passed under
Section 73of the Karnataka Goods and Services Tax Act, 2017
The critical issue before the Court was that the proprietor of MD Engineers had been unable to participate in the proceedings and respond to the notices issued by the department. The ex parte nature of the final order became the primary ground of challenge before the High Court.
Grounds Raised by the Petitioner
Personal Hardship and Medical Circumstances
The petitioner's counsel, Sri E I Sanmathi, placed before the Court a set of compelling personal circumstances that had prevented the proprietor from engaging with the tax proceedings during the relevant period: