Karnataka HC Gives Bullion Trader Chance To Contest ₹92 Lakh GST Demand After Ex-Parte Order, On ₹25,000 Costs

In brief

The question

1. Whether the ex parte adjudication order, passed without affording the petitioner an opportunity to respond, warranted writ relief despite the statutory appeal remedy under Section 107.

The court held

The petition was allowed, subject to the petitioner paying ₹25,000 to the Armed Forces Battle Casualties Welfare Fund within two weeks and filing proof of payment with the Registry and the Appellate Authority.

It also directed

The petitioner was directed to appear before the Original Authority on 13 November 2026; upon verification of payment, that authority must allow the petitioner to submit a reply and relevant documents and then pass appropriate orders under the GST Act.

All contentions were left open.

01Facts

The petitioner challenged an adjudication order dated 21 January 2025 under Section 73(9) of the KGST/CGST Act, 2017, which raised a demand of ₹92,08,898 for tax period 2020–21.

p. 5

It contended that the order was passed ex parte without prior notice or an opportunity to respond.

p. 5

The petitioner also sought relief concerning Section 16(2)(c) and the application of GST Circulars Nos. 183/15/2022-GST and 193/05/2023-GST; counsel expressly did not press the constitutional challenge to Section 16(2)(c).

pp. 3–4

The State and Union opposed the petition, including on the ground that an appeal under Section 107 was available.

p. 17

02Issues

i.1. Whether the ex parte adjudication order, passed without affording the petitioner an opportunity to respond, warranted writ relief despite the statutory appeal remedy under Section 107.

p. 5, 17

ii.2. Whether the petitioner should receive relief consistent with the approach adopted in the cited coordinate-bench decision.

pp. 5–6, 17

03Law Applied

Section 73(9) of the KGST/CGST Act, 2017, provides for determination of tax, interest and penalty; Section 79 concerns recovery of amounts due, and Section 107 provides an appellate remedy.

p. 5, 17

The Court applied the principle of natural justice that a person affected by an adjudicatory order must be afforded an opportunity to be heard; the availability of an appeal did not preclude writ intervention where the petitioner had been proceeded against ex parte in violation of that principle.

p. 17

The Court also relied on a coordinate-bench decision granting relief in comparable circumstances.

pp. 5–6, 17

The petitioner’s challenge to Section 16(2)(c) was not pressed and was dismissed on that basis.

p. 4

Provisions in the judgment · 11 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 16 Section 17 Section 18 Section 73 Section 79 Section 107 Section 168

KARNATAKA GOODS AND SERVICES TAX ACT, 2017 Section 16 Section 73 Section 79 Section 107

04Reasoning

The Court accepted the petitioner’s contention that it had been placed ex parte and found that the adjudication order had been made in violation of natural justice.

p. 5, 17

It therefore declined to treat the Section 107 appeal remedy as a bar to writ relief and, relying on the cited coordinate-bench decision, granted the petitioner an opportunity to respond before the Original Authority.

pp. 6, 17–19

The Court did not decide the merits of the Section 16(2)(c) challenge or the petitioner’s substantive entitlement under the cited circulars; it left all parties’ contentions open.

p. 4, 19