Multiple Adjudication Orders for Same Tax Period Invalid; Ex-Parte Orders Remanded for Fresh Consideration

Multiple Adjudication Orders for Same Tax Period Invalid; Ex-Parte Orders Remanded for Fresh Consideration

Issue

1. Multiple Orders: Whether the GST authorities can pass multiple/separate adjudication orders under Section 73 for the same tax period (2020-21).

2. Natural Justice: Whether ex-parte adjudication orders passed due to the assessee’s failure to file a reply should be set aside to afford a fresh opportunity in the interest of justice.

Facts

• The Proceedings: The Respondent authorities initiated proceedings under Section 73 of the CGST/KGST Act against the assessee for the tax periods 2019-20, 2020-21, 2021-22, and 2022-23.

• The Anomaly (2020-21): For the specific tax period of 2020-21, the authorities passed three separate adjudication orders.

• The Default (Other Periods): For the remaining periods, the assessee failed to submit a reply to the Show Cause Notice (SCN). Consequently, the authorities passed ex-parte adjudication orders.

• The Challenge: The assessee approached the High Court, arguing that the proceedings violated the principles of natural justice as no sufficient opportunity was granted to defend their case.

Decision

• The Karnataka High Court ruled in favour of the assessee.

• On Multiple Orders: The Court held that passing three separate adjudication orders for the single tax period of 2020-21 is not permissible in law. Consequently, these orders were quashed.

• On Ex-Parte Orders: Regarding the remaining orders where the assessee failed to reply, the Court adopted a “justice-oriented approach.” It held that the assessee should not be condemned unheard due to procedural lapses.

• Remand: All the impugned orders were set aside. The matter was remitted back to the Respondent for fresh consideration in accordance with the law, granting the assessee an opportunity to file a reply and be heard.

Key Takeaways

• • One Period, One Assessment: The GST framework generally envisages a consolidated assessment for a specific tax period. Splitting the same period into multiple adjudication orders under the same section is procedurally irregular and legally unsustainable.

  • Justice Over Technicality: High Courts often intervene to set aside ex-parte orders—even when the taxpayer is at fault for not replying—to ensure that tax demands are adjudicated on merits rather than on default.

• Opportunity to Cure: A remand by the High Court essentially resets the clock, allowing the taxpayer to file a detailed reply and evidence that they missed submitting earlier.