M/S Adhi Easwer Trading Company Vs the Assistant… — GST and Indirect Tax | Karnataka HC (2026)

M/S Adhi Easwer Trading Company Vs the Assistant… — GST and Indirect Tax | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Impugned adjudication order (Annexure-D) set aside; order at Annexure-E and notice at Annexure-F also set aside; matter remitted to the stage of reply to the show cause notice subject to deposit of 10% of the tax; petitioner to appear before the respondent without further notice on 24.02.2026, failing which the indulgence stands withdrawn; all contentions kept open; petition disposed of.

Issue for consideration

Whether the adjudication order dated 20/02/2025 (Annexure-D), passed and pronounced on the show cause notice without the benefit of any reply on merits from the petitioner and asserted to be ex parte, should be set aside/quashed and the petitioner afforded an opportunity to file a reply. +1 more

Court's answer

Taking a lenient view, and noticing that adjudication had been made on merits without the benefit of a reply on merits from the petitioner, the Court held it appropriate to afford the petitioner an opportunity to take his stand.

Ratio / Principle

The order of adjudication at Annexure-D is set aside; the order at Annexure-E and the notice at Annexure-F are also set aside.

Key takeaways

The matter is remitted to the stage of reply to the show cause notice, subject to the petitioner paying 10% of the tax to the department as a deposit.ratio¶35
The petitioner is to appear before the respondent without further notice on 24.02.2026; if the petitioner does not avail of the opportunity, it would be disentitled of the indulgence granted by the Court.ratio¶35
All contentions of the parties are kept open.

Detailed headnote1 paragraphs

Karnataka HC (Bengaluru), Single Judge (S Sunil Dutt Yadav J), WP No. 3005 of 2026 (T-RES), decided 03-02-2026: Adjudication order under S. 73(9) r.w.s. 61 and 50 of the KGST/CGST Act, 2017 dated 20/02/2025 (tax period April 2020 - March 2021) passed on the show cause notice on the materials on record without the benefit of any reply on merits; notices had gone to the e-mail ID of the petitioner's auditor and the petitioner learnt of the proceedings only upon recovery steps and freezing of its bank account. Taking a lenient view despite the respondent's contention that the lapse was the auditor's, the Court set aside the adjudication order (Annexure-D), the order at Annexure-E and the notice at Annexure-F, remitted the matter to the stage of reply to the show cause notice on a deposit of 10% of the tax, directed appearance before the respondent without further notice on 24.02.2026 (failure forfeiting the Court's indulgence), and kept all contentions open; petition disposed of.

NC: 2026:KHC:6118 WP No. 3005 of 2026

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HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 3^RD DAY OF FEBRUARY, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 3005 OF 2026 (T-RES)

BETWEEN:

M/S ADHI EASWER TRADING COMPANY A PROPRIETARY CONCERN HAVING REGISTERED OFFICE AT NO. 823 SREE SAILAM, BEHIND KOSHY HOSPITAL RICHES GARDEN MAIN ROAD DOORAVANINAGAR BANGALORE, KARNATAKA 560 016 GSTIN: 29EPNPP0010P1ZF PAN NO. EPNPP 0010P REPRESENTED BY ITS PROPRIETRIX MR. PREMA N W/O LATE G NAGARAJAN AGED ABOUT 66 YEARS …PETITIONER (BY SRI. RAJEEV CHANNAPPA NULVI., ADVOCATE)

Digitally (BY SRI. RAJEEV CHANNAPPA NULVI., ADVOCATE) signed by

VIJAYA P AND: Location: HIGH COURT

OF THE ASSISTANT COMMISSIONER KARNATAKA OF COMMERCIAL TAXES LGSTO-35, BANGALORE NO. 58, 1ST FLOOR HAL 2ND STAGE DEFENCE COLONY 100 FT ROAD, INDIRA NAGAR BANGALORE 560 038. …RESPONDENT (BY SRI. HEMAKUMAR, AGA)

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HC-KAR

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ADJUDICATION ORDER U/S 73(9) R.W.S 61 AND 50 OF THE KGST/CGST ACT, 2017 DATED 20/02/2025 FOR THE TAX PERIOD APRIL, 2020 - MARCH, 2021, PASSED BY THE RESPONDENT AUTHORITY, i.e., THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, NO. ACCT (LGSTO35)/DRC-07/2020-21/ORDER-U/S 73/2024-25 LGSTO-35, BANGALORE (ANNEXURE-D).

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

ORAL ORDER

Petitioner has assailed the order of adjudication at Annexure-D and asserts that the order passed is an ex-

parte order. Petitioner has also challenged the order at Annexure-E and the notice at Annexure-F.

It is submitted that the authority has decided

and adjudicated upon the show cause notice on the materials available on record without the benefit of reply on merits to the show cause notice. It is further submitted that the notices were sent to the email ID provided by the auditor and the same was not brought to the notice of the

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NC: 2026:KHC:6118 WP No. 3005 of 2026

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petitioner, who came to know of it only when there were recovery proceedings and bank account was frozen.

Sri. Hemakumar, learned Additional

Government Advocate submits that petitioner is solely responsible for not having participated in the proceedings as the lapse is attributable to his auditor which is of no concern to the department and the lapse of his auditor cannot be a ground to reopen the proceedings.

However taking a lenient view of the matter

and noticing that there is adjudication on merits and also taking note of the consequences that would visit the petitioner if the order of adjudication is allowed to stay when such order of adjudication is passed without the benefit of reply on merits by the petitioner, it would be appropriate to afford an opportunity to the petitioner to take his stand.

Accordingly, the order at Annexure-D is set

aside. The order at Annexure-E and the notice at

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Annexure-F are also set aside. The matter is remitted to the stage of reply to the show cause notice. Petitioner to pay 10% of the tax to the department as a deposit. Petitioner to appear before the respondent without further notice on 24.02.2026. Needless to state, if the petitioner does not avail of such opportunity, they would be disentitled of the indulgence granted by the Court. All contentions are kept open.

In light of the above, the petition is disposed

of .

SD/(S SUNIL DUTT YADAV) JUDGE

VP