GST adjudication set aside for want of opportunity to respond; matter remitted for fresh consideration and recovery action withdrawn.

An ex parte GST adjudication order under Section 73(9) was set aside because the assessee had not been given a full opportunity to /contest the show-cause notice on alleged excess input tax credit and return mismatches. The High Court reopened the matter for fresh consideration so the petitioner could file a reply and be heard on the disputed discrepancies. Once the adjudication order was interfered with, the consequential bank attachment and recovery action could not be sustained and were also set aside.

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Issues: Whether the ex parte adjudication order passed under Section 73(9) of the Karnataka Goods and Services Tax Act, 2017 was liable to be set aside and the matter remitted for fresh consideration, with consequential relief against recovery action.

Analysis: The order under challenge was passed ex parte on the basis of material available with the authority, while the petitioner had not filed a reply to the show-cause notice. In the circumstances, and in view of the request that the petitioner be allowed to answer the notice and contest the alleged discrepancies relating to excess input tax credit and mismatch between returns, the order was treated as fit for interference. Since the adjudication had proceeded without a full opportunity to respond, the matter was required to be reopened for reconsideration. The recovery action founded on the adjudication could not survive once the adjudication order was set aside.

Conclusion: The ex parte adjudication order was set aside, the matter was remitted for fresh consideration, and the consequential bank attachment and recovery action were set aside.

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