Ex Parte Assessment Order Remanded for Re-adjudication After Setting Aside Demand for Exemption Support Documents

By | August 29, 2026
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Ex Parte Assessment Order Remanded for Re-adjudication After Setting Aside Demand for Exemption Support Documents

Ex Parte Assessment Order Remanded for Re-adjudication After Setting Aside Demand for Exemption Support Documents
Issue
Whether an ex parte adjudication order passed under Section 73(9) demanding tax on exempted turnover is liable to be set aside and remanded when the petitioner asserts readiness to furnish supporting documents to the Show Cause Notice.
Facts
  • Issuance of SCN: The Revenue issued a Show Cause Notice (SCN) under Section 73 alleging that the petitioner had not submitted supporting documents for the exempted turnover declared in its GSTR-3B return.
  • Failure to Reply: The petitioner failed to file a reply to the SCN and made no voluntary tax payments.
  • Ex Parte Adjudication: The proper officer recorded the non-furnishing of documents and non-submission of a response, concluding the proceedings ex parte.
  • Demand Order: An adjudication order dated 13.08.2024 was passed under Section 73(9) confirming the tax demand.
  • Writ Petition: The petitioner challenged the ex parte adjudication order by filing a writ petition, asserting its readiness to meet the grounds raised in the notice and furnish supporting documents.
Decision
  • The court observed that the SCN and the impugned order explicitly recorded the absence of a reply and supporting documents from the petitioner.
  • To meet the ends of justice and afford a fair opportunity of hearing, the ex parte adjudication order dated 13.08.2024 was set aside.
  • The matter was remitted back to the proper officer to resume proceedings from the stage of filing a reply to the Show Cause Notice, keeping all contentions open.
  • The issue was decided as Matter Remanded.
Key Takeaways
  • Remand for Natural Justice: Ex parte orders confirming tax demands due to procedural non-responsiveness can be set aside to ensure a fair hearing if the assessee demonstrates readiness to submit necessary supporting evidence.
  • Resumption from SCN Stage: When an ex parte order is quashed on principles of natural justice, proceedings restart from the stage of responding to the initial Show Cause Notice.
  • Preservation of Rights: Remanding the matter with all contentions kept open ensures both the taxpayer and the Revenue can present their cases on merits.
HIGH COURT OF KARNATAKA
Arunagiri Imports and Exports (P.) Ltd.
v.
State of Karnataka
S. Sunil Dutt Yadav, J.
WRIT PETITION NO. 19907 OF 2025 (T-RES)
APRIL  2, 2026
Ms. Monihsa H.L. and Sathyanarayana T.R., Advs. for the Petitioner. K. Hema Kumar, AGA for the Respondent.
ORDER
1. The petitioner has filed the present petition seeking for setting aside the order at Annexure-A dated 13.08.2024 passed under Section 73(9) of the Karnataka Goods and Service Tax Act, 2017 (for short ‘the Act’). The petitioner has also sought for setting aside of the demand raised pursuant to the order at Annexure-A.
2. It is the case of the petitioner that the respondent authority has concluded the proceedings initiated against the petitioner by way of an adjudicatory order, which in-effect is an ex-parte order without benefit of any reply to the show-cause notice. It is submitted that the petitioner’s business was under loss and due to bona-fide lapse the petitioner was not able to make out a reply.
3. It is further submitted that there are certain recoveries pursuant to the impugned order and the petitioner may be granted an opportunity to take stand on merits by way of reply to the show-cause notice, by setting aside the impugned order and granting an opportunity. It is asserted that the petitioner would meet the grounds raised in the show-cause notice by placing appropriate material before the authority.
4. Perused the order of adjudication. It is noticed that the show-cause notice was issued on the premise that the petitioner has not submitted documents in support of the exempted turnover as declared in GSTR3B. The authorities have noticed that the petitioner has not submitted any documents in support of declared exempted turnover in GSTR3B. It is also observed in the impugned order that the petitioner has not filed any reply nor discharged payment voluntarily.
5. In light of the assertion of the petitioner that the petitioner would meet the grounds raised in the show-cause notice and observing that the order passed is an ex-parte order, it would meet the ends of justice by setting aside the order of adjudication passed under Section 73(9) of the Act dated 13.08.2024 and remitting the matter back to respondent No.3 for reconsideration from the stage of reply to show-cause notice.
6. Accordingly, the order of adjudication at Annexure-A is set aside and the matter is remitted to the stage of reply to show-cause notice. The petitioner to make out reply to the show-cause notice. The petitioner to appear before respondent No.3 without further notice on 04.05.2026. All contentions are kept open.
7. The assertion of the petitioner that there has been recovery pursuant to the impugned order of adjudication, such matter to be verified by the authorities. The petitioner to correct the description of respondent No.3 in the cause-title.
Accordingly, petition is disposed of.