Ex parte GST adjudication may be remanded when no reply to the show cause notice was considered

Ex parte tax adjudication orders passed without considering a reply to the show cause notice may be set aside where denial of participation causes prejudice and a fresh opportunity of hearing is required in the interests of justice. Under the Karnataka GST framework, the orders were made under Section 73(9) without the benefit of a reply, and the related appellate rejection was noted to rest only on delay under Section 107(1). The proceedings were reopened from the stage of reply, the adjudication orders were remitted for fresh consideration, and consequential action was directed to be withdrawn.

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Issues: Whether the ex parte adjudication orders passed under the Karnataka Goods and Services Tax Act, 2017 were liable to be set aside and the matter remitted to the stage of reply to the show cause notice.

Analysis: The orders under Section 73(9) of the Karnataka Goods and Services Tax Act, 2017 were passed without the benefit of a reply to the show cause notice. The appellate order against one adjudication order had been rejected only on the ground of delay under Section 107(1) of the Karnataka Goods and Services Tax Act, 2017, and the Court took note that the orders were ex parte. In view of the absence of a reply, and considering the financial prejudice that would follow if the orders were allowed to stand, the matter was considered fit for reopening from the stage of reply to the show cause notice.

Conclusion: The ex parte adjudication orders were set aside and the matter was remitted to the stage of reply to the show cause notice, in favour of the petitioner.

Final Conclusion: The proceedings were reopened for fresh adjudication after permitting the petitioner to respond to the notice, and ancillary consequential action was directed to be withdrawn.

Ratio Decidendi: An ex parte tax adjudication passed without considering a reply to the show cause notice may be set aside and remanded where denial of participation would cause prejudice and the interests of justice require a fresh opportunity of hearing.

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