Bona fide non-participation warrants a fresh opportunity to contest a GST demand before recovery.

The petitioner challenged an adjudication order dated 10 December 2025, its summary, and a garnishee notice dated 31 July 2026, all relating to the tax period April 2021 to March 2022.

The adjudication order confirmed the show-cause notice proposition after the petitioner failed to participate in the proceedings.

The petitioner stated that notices had been sent to email addresses of its auditor’s staff that changed over time, and that it consequently lacked effective knowledge of the proceedings.

On the merits, it asserted that its receipts, including GST/TDS, had been declared and that a reconciliation would show no, or only a marginal, mismatch between its GSTR-3B and GSTR-7 returns.

1. Whether the petitioner’s explanation for non-participation and its proposed reconciliation justified setting aside the adjudication order and restoring the proceedings for a fresh response to the show-cause notice.

2. Whether the summary of the adjudication order and the garnishee notice should also be set aside pending the restored adjudication.

The Court considered the adjudication under Section 73(9) and the garnishee notice under Section 79(1)(c) of the KGST Act, 2017, as identified in the challenged proceedings and the petition.

It applied the procedural principle that a party should have an effective opportunity to respond before a tax demand is enforced, particularly where the party provides an explanation for non-participation and raises a potentially material reconciliation issue.

No precedent was cited.

The Court accepted that the petitioner’s explanation concerning changing auditor-staff email addresses could account for its failure to participate, and considered its proposed reconciliation potentially relevant to whether the alleged mismatch—and resulting demand—was justified.

Because the reconciliation had not yet been considered by the respondent, the Court held that the petitioner should have another opportunity to respond and that the matter should be fully adjudicated before the demand was enforced.

The Court quashed the adjudication order, its summary, and the garnishee notice, and restored the proceedings so the petitioner could respond to the show-cause notice dated 22 September 2025.

The petitioner was directed, without further notice, to file its response with a detailed reconciliation by 11 November 2026 and, by that date, to deposit 10% of the tax GST, subject to the outcome of the restored proceedings.