Natural justice breach in GST adjudication led to quashing of demand and remand for fresh hearing.

The assessment order under the CGST/KGST regime was unsustainable because it ignored the petitioner's duly filed reply and supporting documents, even though they were available on the record. That non-consideration amounted to a breach of natural justice and vitiated the adjudication. The Karnataka HC quashed the impugned order and the consequential DRC-07 demand notice, and remitted the matter for fresh decision on merits after taking the reply and documents into account and granting an opportunity of hearing.

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Issues: Whether the assessment order and consequential demand notice under Section 73(9) of the CGST/KGST regime were liable to be quashed for non-consideration of the reply and supporting documents, and whether the matter required remand for fresh adjudication after hearing the petitioner.

Analysis: The record showed that the petitioner had filed a detailed reply to the show-cause notice and had also uploaded supporting documents on the portal, yet the impugned order proceeded on the basis that no reply had been filed. Since the reply and documents were available on record but were not considered, the adjudication was vitiated by breach of natural justice.

Conclusion: The impugned order and the DRC-07 demand were quashed, and the matter was remitted for fresh consideration after taking the petitioner's reply and documents on record and affording an opportunity of hearing.

Final Conclusion: The dispute was sent back to the adjudicating authority for a de novo decision on merits after compliance with fair hearing requirements.

Ratio Decidendi: An adjudication that ignores a duly filed reply and supporting material is unsustainable for violation of natural justice and must be set aside with a fresh hearing.

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