The Karnataka High Court has quashed an ex-parte adjudication order passed against a taxpayer and directed a fresh reconsideration of the matter, while also nullifying consequential recovery actions including bank account attachment.
The bench of Justice S Sunil Dutt Yadav noted that the adjudication order was indeed passed ex-parte. The Court examined the contents of the order, which alleged wrongful availment of Input Tax Credit (ITC) and questioned the genuineness of transactions, including claims that invoices were issued without actual supply of goods.
The petitioner/assessee, M/s. G.S. and Company challenging an adjudication order passed by GST authorities. The petitioner contended that the order had been passed ex-parte without an opportunity to present its case and that tax had already been recovered pursuant to such order.
The petitioner submitted that failure to respond to the show-cause notice was due to a bona fide lapse and sought an opportunity to file a reply and contest the allegations on merits.
However, the Court emphasized that such serious findings must be tested through proper adjudication after giving the taxpayer a fair opportunity to respond.
The High Court held that the ex-parte adjudication order deserved to be set aside. The matter should be remitted back to the adjudicating authority for fresh consideration. The petitioner must be given an opportunity to file a reply to the show-cause notice and present its case fully. All contentions of both parties are kept open for reconsideration.
The Court also clarified that although tax had already been recovered, such recovery would be subject to the outcome of fresh proceedings.
The Court ruled that the attachment of bank accounts initiated for recovery purposes stands set aside. Any recovery already made will remain provisional and subject to the final adjudication outcome.
The petitioner has been directed to appear before the adjudicating authority on 13 May 2026 without further notice and submit its reply to the show-cause notice.
Case Details
Case Title: M/S. G.S. And Company Versus State of Karnataka
Citation: JURISHOUR-702-HC-2026(KAR)Â
Case No.: Writ Petition No. 8855 Of 2026 (T-Res)
Date: 09/04/2026
Counsel For Petitioner: Angadi S.V., Advocate
Counsel For Respondent: K. Hema Kumar, Aga
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