Karnataka HC Restores Contractor’s Late Appeal Against ₹42.15-Lakh GST Demand, Conditional On Further 10% Deposit Within Two Weeks

The petitioner was assessed to tax and penalty of ₹42,15,944 under Section 73(9) of the CGST/KGST Acts following a mismatch between input tax credit claimed in GSTR-3B and that reflected in GSTR-2A.

The petitioner did not reply to the show-cause notice or participate in the adjudication, and the first respondent passed an ex parte order on 20 November 2024.

The petitioner’s appeal under Section 107 was dismissed as time-barred because the delay exceeded the statutory condonable period.

The petitioner then sought, under Articles 226 and 227 of the Constitution, to set aside the adjudication and appellate orders or, alternatively, to obtain a remand.

Section 107 of the CGST/KGST Acts provides the statutory route for an appeal and limits the appellate authority’s power to condone delay.

In exercising its jurisdiction under Articles 226 and 227, the High Court relied on Yallappa Patil v. Assistant Commissioner and Others, W.A. No. 100608/2025, and the coordinate-bench decisions in Jai Hind Enterprises v. Assistant Commissioner of Commercial Taxes and Others, W.P. No. 107549/2024, and Bandigisab Maheboobsab Bijapur v. Assistant Commissioner and Others, W.P. No. 108239/2025.

It also followed the coordinate-bench decision in W.P. No. 102532/2026, which had condoned delay and restored an appeal for determination on the merits.

The court applied those decisions to grant relief notwithstanding the statutory limit on the appellate authority’s power to condone delay.

The appellate authority had dismissed the appeal solely because the delay exceeded the period it could condone.

The petitioner asserted that the delay arose because it had not been notified of the ex parte order, and that dismissal on limitation would deprive it of an opportunity to contest the tax demand.

Applying the cited decisions, the Court considered the matter sufficiently similar to warrant restoring the appeal rather than leaving the petitioner without a merits determination.

It conditioned that relief on payment of an additional 10% and directed an expedited hearing.

The Court set aside the adjudication order dated 20 November 2024, the appellate order dated 7 November 2025, and the show-cause notice dated 14 October 2024; condoned the delay; and restored Appeal No. GST-405/2025-26, subject to payment of an additional 10% within two weeks.

The petitioner was directed to appear before the appellate authority on 13 November 2026, and the authority was directed to decide the appeal on its merits within four weeks of the first appearance.

All contentions on the merits were left open.