Ex parte GST assessment set aside for fresh consideration of objections and amended Section 16(5).

The petitioner, a registered proprietorship, was issued a scrutiny notice for 2018–19 and later an intimation in Form GST DRC-01A proposing tax of ₹6,98,959.

The petitioner paid ₹6,98,584 through Form GST DRC-03 on 26 June 2023.

The respondent subsequently issued a show-cause notice under Section 73 and passed an order dated 18 April 2024 determining tax, interest and penalty at ₹13,13,521.

No reply had been filed to the notice and the petitioner did not appear before the authority.

In July 2026, the respondent issued Form GST DRC-13 to the petitioner’s bank under Section 79(1)(c).

The petitioner challenged the recovery action and underlying proceedings, asserting that the payment had not been credited and raising the subsequent amendment to Section 16(5) of the GST Acts; it also sought refunds.

1. Whether the ex parte adjudication order and consequential DRC-13 recovery action should be set aside to allow the petitioner to respond to the show-cause notice.

2. Whether the petitioner’s payment and reliance on Section 16(5) of the GST Acts required consideration by the respondent authority on remand.

Section 61 of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017, read with Rule 99 of the corresponding GST Rules, provide for scrutiny of returns.

Section 73 provides for determination of tax not paid or short-paid, together with applicable interest and penalty.

Section 79(1)(c) provides for recovery through a direction to a person, including a bank, holding money for the taxable person.

The Court also directed the authority to consider the application and effect of Section 16(5) of the GST Acts.

The governing procedural principle applied was that, in the circumstances of this case, the petitioner should have an opportunity to place objections and supporting material before the authority; the Court did not decide the substantive tax or refund claims.

The adjudication order had been passed ex parte, and the petitioner had not filed a reply to the show-cause notice.

Although the petitioner relied on its earlier payment and Section 16(5), those matters had not been considered by the authority.

The Court therefore concluded that the petitioner should be permitted to submit its objections and supporting materials, leaving the payment issue and the effect of Section 16(5) for determination by the respondent on the merits and in accordance with law.

The order dated 18 April 2024 and consequential DRC-13 notice dated 13 July 2026 were set aside.

The petitioner was permitted to file objections to the show-cause notice within three weeks of receiving the order and to raise all contentions, including those concerning Section 16(5).

The respondent was directed to consider the reply and pass orders on the merits; the petitioner was also directed to appear before the authority on 27 October 2026.

No order as to costs was made.

The Court did not grant the claimed refunds, leaving the relevant issues for the respondent’s consideration.