After Accidents Hospitalise Proprietor And Brother, Karnataka HC Gives Bengaluru Trader Another Chance To Contest Ex-Parte GST Assessment Despite Late Appeal

The petitioner challenged an ex parte adjudication order under Section 73(9) of the CGST/KGST Act for FY 2019–20 and an appellate order dismissing its statutory appeal as time-barred.

It said it had not seen the emailed notices, which had gone to its spam folder, and that the proprietor and his brother had separately suffered accidents requiring prolonged hospitalisation.

The underlying demand concerned alleged excess ITC and non-reversal of ITC within the time contemplated by Rule 37 of the CGST Rules.

The petitioner asserted that it had reversed ITC where required and could produce invoices and reconciliation materials showing no wrongful availment.

The writ petition sought to set aside both orders and restore the proceedings to the show-cause-notice stage.

The proceedings arose under Sections 73(1) and 73(9) of the CGST/KGST Act, concerning the show-cause notice and adjudication, and Section 107(11), read with Section 20, concerning the appellate order.

Rule 37 of the CGST Rules was relevant to the alleged failure to reverse ITC within the prescribed time.

The Court acted under Article 226 of the Constitution to review the challenged orders and restore the proceedings for further adjudication.

It cited no precedent and did not set out a general test for condoning delay; its decision rested on the circumstances pleaded and the need to consider the petitioner’s substantive materials.

The Court noted that the adjudication had proceeded ex parte and the appeal had been dismissed on limitation, leaving the petitioner’s asserted ITC reversals and invoice reconciliation unexamined.

It considered the petitioner’s explanation that it had not become aware of the proceedings until recovery action, together with the accidents and hospitalisations affecting the proprietor and his brother.

Because the petitioner claimed that its records could demonstrate that no wrongful ITC availment had occurred, the Court concluded that it should have an opportunity to present those materials for complete adjudication.

It restored the proceedings to the show-cause-notice stage and permitted the petitioner to file a detailed reply, reconciliation, invoices, and relevant GSTR forms with the third respondent by 30 November 2026, without further notice.