GST s.73(9) tax demand order challenged for non-reply to show-cause notices; set aside and remitted for fresh hearing.

The dominant issue was whether an order passed under s.73(9) of the KGST/CGST Act, 2017 could stand despite the assessee's failure to reply to the pre-intimation and show-cause notices. The HC accepted the assertion of bona fide inability and sufficient cause, and applied a justice-oriented approach to ensure an effective opportunity of hearing and contest. Consequently, the impugned adjudication order was set aside and the matter was remitted to the adjudicating authority for fresh consideration from the stage of filing a reply to the show-cause notice, subject to payment of costs to the HC Legal Services Authority.

---

---

1. ISSUES PRESENTED AND CONSIDERED

(a) Whether the adjudication order confirming demand under Section 73(9) of the CGST/KGST Act, 2017, passed after the petitioner did not file a reply to the show-cause notice, should be set aside and the matter remitted for fresh consideration on the petitioner's plea of non-receipt of notices and "bonafide reasons, unavoidable circumstances and sufficient cause".

(b) What conditions and directions are appropriate while granting a fresh opportunity to reply and contest the proceedings, including costs and consequences of non-appearance.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Setting aside of adjudication order and remand for fresh consideration

Legal framework (as discussed in the judgment): The Court noted that the show-cause notice was issued under Section 73 of the CGST/KGST Act, 2017 and that the impugned adjudication order confirming demand (including tax, interest, and penalty) was passed under Section 73(9) after no reply was submitted.

Interpretation and reasoning: The Court treated as decisive the petitioner's specific assertion that the notices were not received and, therefore, the petitioner could not submit replies/documents and could not contest the proceedings. On this basis, the Court accepted that the omission to reply was claimed to be due to "bonafide reasons, unavoidable circumstances and sufficient cause". The Court held that, having regard to this assertion, it was "just and appropriate" to adopt a "justice oriented approach" by granting one more opportunity to the petitioner, rather than sustaining the adjudication that followed the non-filing of reply.

Conclusions: The Court set aside the adjudication order dated 27.02.2025 and remitted the matter to the adjudicating authority for reconsideration afresh in accordance with law from the stage of the petitioner submitting a reply to the show-cause notice dated 27.11.2024.

Issue (b): Conditions and directions for fresh opportunity, including costs and default consequences

Interpretation and reasoning: While granting remand, the Court imposed a monetary condition to balance equities and regulate the indulgence of a further opportunity. The Court also issued operational directions to ensure expeditious resumption of adjudication and to prevent abuse of the remand order.

Conclusions: The Court directed the petitioner to appear before the adjudicating authority on a specified date without awaiting further notice, reserved liberty to file replies/documents to be considered by the authority, and required the authority to provide "sufficient and reasonable opportunity" and proceed in accordance with law. The Court imposed costs of Rs.10,000/- payable to the High Court Legal Service Authority. The Court further ordered that if the petitioner fails to appear on the specified date, the remand order would stand automatically recalled without further orders.

---