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Bona fide medical reasons justify remanding ex parte order despite failure to reply to SCN

Issue

Whether an ex parte adjudication order should be set aside and the matter remanded when the petitioner failed to reply to the Show Cause Notice (SCN) due to genuine personal difficulties (medical emergency), despite having replied to the pre-intimation notice.

Facts

Initial Compliance: The Revenue Department issued a pre-intimation in Form GST DRC-01A, to which the petitioner successfully submitted a reply.
Show Cause Notice: Subsequently, an SCN under Section 73 of the CGST/KGST Act was issued.
Non-Compliance: The petitioner failed to submit a reply to this specific SCN.
Ex Parte Order: Consequently, the Adjudicating Authority passed an ex parte order confirming the demand with interest and penalty, issuing a summary in Form DRC-07.
Reason for Default: The petitioner challenged the order, citing bona fide reasons: his father was suffering from prostate cancer, necessitating frequent travel to Odisha, which resulted in an inability to access the GST portal during the relevant period.
Relief Sought: The petitioner requested one more opportunity to contest the demand on its merits.

Decision

Justice-Oriented Approach: The High Court accepted the petitioner’s specific assertion of unavoidable circumstances and sufficient cause (medical emergency).
Merit over Technicality: The Court held that it was just and appropriate to adopt a justice-oriented approach rather than upholding the order solely on the technical ground of non-response.
Order Quashed: The impugned ex parte order and the DRC-07 summary were set aside.
Remand Directions: The matter was remitted to the Adjudicating Authority. The proceedings were restored to the stage of the petitioner submitting a reply to the SCN.
Imposition of Costs: The relief was granted subject to the petitioner paying a cost of Rs. 5,000 to the High Court Legal Services Authority, Bengaluru.

Key Takeaways

Humanitarian Grounds: Courts are willing to condone procedural lapses (like missing a reply deadline) if the assessee can demonstrate a “sufficient cause” such as a family medical emergency.

Prior Conduct Matters: The fact that the petitioner had replied to the earlier Intimation (DRC-01A) likely helped establish that the subsequent failure to reply to the SCN was not willful negligence.

Restoration with Costs: While Courts protect the right to be heard, they often impose monetary costs on the assessee to acknowledge the procedural delay caused to the Revenue.

HIGH COURT OF KARNATAKA

Sibu Prasad Praharaj

Commercial Tax Officer

S.R.Krishna Kumar, J.

WRIT PETITION NO. 26319 OF 2025 (T-RES)

OCTOBER 28, 2025

Lepakshi N. Naik and L.S. Karthikeyan, Advs. for the Petitioner. Hema Kumar K., AGA for the Respondent.

ORDER

1. In this petition, petitioner seeks for the following reliefs:-

“a)

Issue a writ in the nature of certiorari or any other appropriate writ / order quashing and setting aside Annexure-A Order No.DRC-11/T./2024-25 in No.DGSTO-04/ACCT-4.2./DRC-07/2024-25 dated 28.05.2024 read with summary of order in Form DRC-07 bearing Reference No.ZD2906240087380 dated 05.06.2024;

(b)

Grant ad interim relief as prayed for;

(c)

Grant such other order or direction as deemed fit in the facts and circumstances of the case in the interest of justice.”

2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.

3. A perusal of material on record will indicate that respondent issued an intimation notice under Form GST DRC-01A dated 12.09.2023 to the petitioner, who filed a reply dated 07.10.2023. Subsequently, the respondent issued a Show Cause notice dated 07.05.2024 under Section 73 of the CGST/KGST Act, 2017. Since the petitioner did not submit his reply to the said show cause notice also, the respondent proceeded to pass the impugned order dated 28.05.2024 under Section 73 of the KGST Act, 2017 confirming the total demand of Rs.14,07,686/- including the tax, interest and penalty.

4. Learned counsel for the petitioner submits that petitioner had filed a reply dated 07.10.2023 to pre-intimation notice and couldn’t submit replies/ documents to the show-cause notice and resultantly couldn’t contest the proceedings. Aggrieved by the said order the petitioner having no option has approached this Court by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit a reply to the pre-intimation notice and show-cause notice and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause and submits that if one more opportunity is provided, by setting aside the impugned order, the petitioner would submit a reply to the show-cause notice and contest the proceedings.

5. Per contra, learned HCGP for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

6. Though several contentions have been urged by both sides, the counsel for the petitioner submits that petitioner’s father was suffering from prostate cancer and required frequent medical attention. The petitioner’s father was staying in his native place in Odisha and the petitioner had to visit him frequently or bring him to Bangalore for treatment. Therefore, the petitioner was not checking the portal regularly and was not able to respond to the notice issued by the respondent, which culminated in the impugned ex-parte order.

7. Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to submit replies and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and provide one more opportunity to the petitioner by setting aside the impugned orders dated 28.05.2024 remitting the matter back to the respondent for reconsideration of the matter afresh in accordance with law from the stage of petitioner submitting reply to the impugned show-cause notice dated 07.05.2024 by imposing cost of Rs.5,000/- on the petitioner payable to the High Court Legal Services Authority, Bengaluru.

8. In the result, I pass the following:

ORDER.

(i)

The petition is hereby allowed subject to payment of cost of Rs.5,000/- to the High Court Legal Services Authority, Bengaluru.

(ii)

The impugned order dated 28.05.2024 passed by the respondent under Section 73 of the KGST Act, 2017 at Annexure – A read with Summary of order in Form DRC-07 dated 05.06.2024 is hereby set aside.

(iii)

The matter is remitted back to the respondent for reconsideration afresh in accordance with law from the stage of petitioner submitting its reply to the notice dated 07.05.2024 issued under section 73 of the CGST/KGST Act, 2017 at Annexure – E.

(iv)

The petitioner is directed to appear before the respondent on 24.11.2025 without awaiting further notice from the respondent.

(v)

The liberty is reserved in favour of the petitioner to submit replies, documents etc., which shall be considered by the first respondent who shall provide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law.

(vi)

In the event, the Petitioner does not appear before the respondent on 24.11.2025 as stated supra, present order shall stand automatically recalled without further orders.

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