Disposed¶45

M/S G S and Company v. the State of Karnataka

Karnataka HC9 Apr 2026WP/6552/2026

Case brief

AI extract

What is this about?

Karnataka GST; Section 73(9) KGST Act 2017; ex-parte adjudication order set aside; DRC-07; excess ITC claim; GSTR-1/GSTR-3B discrepancy; no reply to show-cause notice; remitted to respondent No.2 for fresh consideration; bank account attachment by way of recovery set aside; rectification request rejected (Annexure-D); appeal against rejection pending/withdrawn (Annexure-E); condonation of delay in filing appeal; Articles 226 and 227; WP (T-RES) 6552/2026; HC-KAR; NC:2026:KHC:19613.

What did the court decide?

Adjudication order dated 20.02.2025 under Section 73(9) KGST Act (Annexure-C) set aside; matter remitted to respondent No.2 for fresh consideration; petitioner permitted to make out reply to the show-cause notice; attachment of bank accounts by way of recovery action set aside; IA for amendment allowed; all contentions kept open.

M/S G S and Company Vs the State of Karnataka — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the ex-parte order of adjudication dated 20.02.2025 passed under Section 73(9) of the Karnataka GST Act, 2017 (Annexure-C) should be set aside and the matter remitted to respondent No.2 for fresh consideration. +1 more

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Court's answer

The order at Annexure-C dated 20.02.2025, being an ex-parte order passed under Section 73(9) of the Act, is set aside; the matter is remitted to respondent No.2 for fresh consideration; the petitioner is permitted to make out a reply to the show-cause notice; all contentions are kept open.

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Ratio / Principle

In light of the setting aside of the order of adjudication, the attachment of bank accounts effected by way of action for recovery is set aside.

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Key takeaways

The interlocutory application seeking amendment of the petition (to include setting aside of the adjudication order at Annexure-C) is allowed; necessary amended petition to be filed.obiter¶25
Petitioner is permitted to amend the description of respondent No.2 and file the amended petition.obiter¶43

Detailed headnote1 paragraphs

High Court of Karnataka (S Sunil Dutt Yadav, J.), by oral order dated 09.04.2026, disposed of W.P. No. 6552 of 2026 (T-RES) filed by M/s G.S. and Company under Articles 226 and 227 of the Constitution. The ex-parte order of adjudication dated 20.02.2025 passed by the Commercial Tax Officer (2nd respondent) under Section 73(9) of the Karnataka Goods and Service Tax Act, 2017 (Annexure-C, No.CTO(GSTO)110/DRC-07/24-25) — completed on the basis of material in the authority's possession on an allegation of excess ITC claim and GSTR-1/GSTR-3B discrepancies, without any reply to the show-cause notice — was set aside and the matter remitted to respondent No.2 for fresh consideration, the petitioner being permitted to make out a reply to the show-cause notice with all contentions kept open. Consequent upon the setting aside of the adjudication order, the attachment of bank accounts by way of action for recovery was also set aside. Earlier, the petitioner's request for rectification had been rejected (Annexure-D) and the appeal against that rejection (Annexure-E) was pending, with counsel undertaking to withdraw it. The IA for amendment of the petition was allowed and the petitioner was permitted to amend the description of respondent No.2.

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NC: 2026:KHC:19613 WP No. 6552 of 2026

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 9^TH DAY OF APRIL, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 6552 OF 2026 (T-RES)

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BETWEEN:

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M/S. G.S. AND COMPANY PROP: SRI. S. JANAKIRAM, S/O LATE V. SHANMUGAM, AGE 52 YEARS, AT NO.656, BASETTYPET, CHICKPET, BENGALURU - 560 052.

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…PETITIONER

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(BY SRI. ANGADI S.V., ADVOCATE)

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AND:

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Digitally signed by MAMATHA R Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA, SECRETARY TO THE GOVT., (GST) (FINANCE), VIDHANA SOUDHA, BENGALURU - 560 002.

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THE COMMERCIAL TAX OFFICER, LGSTO-110, DGSTO-03, BENGALURU - 560 011.

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ASST. COMMISSIONER (GST), AT LGS TO, 110, DGSTO (3), BMTC BUS STAND, 2^ND FLOOR, JAYANAGAR 4^TH BLOCK, JAYANAGAR, BENGALURU - 560 011.

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…RESPONDENTS

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(BY SMT. JYOTI MARADI, HCGP)

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2 - NC: 2026:KHC:19613 WP No. 6552 of 2026

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HC-KAR

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ALLOW THE WRIT PETITION BY DIRECTING THE RESPONDENTS TO CONDONE THE DELAY IN FILING THE APPEAL AND ALSO BY SETTING ASIDE THE ORDER DATED 20-02-2025 PASSED BY THE 2^ND RESPONDENT (ANNEXURE-C) BEARING NO.CTO(GSTO)110/ DRC-07/24-25 AND ALSO TO DIRECT 3^RD RESPONDENT TO PASS APPROPRIATE ORDER AFTER GIVING A REASONABLE OPPORTUNITY TO THE PETITIONER BEFORE PROCEEDING TO PASS ANY FRESH ORDER IN ACCORDANCE WITH LAW AND ETC.

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THIS PETITION COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

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ORAL ORDER

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The petitioner has filed an interlocutory application seeking for amendment of the petition seeking to set aside the order of adjudication at Annexure-C. In light of the submission made and averments of the said application, IA is allowed. Necessary amended petition to be filed.

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It is noticed that the petitioner has assailed the

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order of adjudication passed under Section 73(9) of the Karnataka Goods and Service Tax Act, 2017 (for short, 'the Act') which is an ex-parte order and the petitioner has not made out any reply to the show-cause notice. There

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3 - NC: 2026:KHC:19613 WP No. 6552 of 2026

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HC-KAR

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has been certain other developments as well, insofar as the petitioner has sought for an order of rectification of the order of adjudication passed, however, such request of the petitioner seeking rectification was rejected as per the order at Annexure-D.

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The petitioner has further filed an appeal challenging the order rejecting the request for rectification at Annexure-E. Though the said appeal is pending, learned counsel for the petitioner submits that they undertake to withdraw the appeal and the Court may take note of the fact that the order under Section 73(9) of the Act, is an ex-parte order and remit the matter back for reconsideration.

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Perused the order of adjudication under Section 73(9) of the Act dated 20.02.2025. The authority has completed the adjudication on the basis of material in its possession. The premise on which adjudication is completed is that the taxpayer is alleged to have claimed

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NC: 2026:KHC:19613 WP No. 6552 of 2026

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HC-KAR

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excess ITC. The authority has noticed discrepancies insofar as GSTR-1 and GSTR-3B.

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Learned counsel for the petitioner submits that taxes have been paid and lapse on the part of the petitioner may be condoned and matter be remitted for reconsideration and petitioner would take steps to meet the grounds raised in the show-cause notice including meeting the grounds raised and demonstrating that the discrepancies as alleged do not exist.

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Taking note that the order is an ex-parte order, the order at Annexure-C dated 20.02.2025 which is an order passed under Section 73(9), is set aside. Matter is remitted to respondent No.2 for fresh consideration. Petitioner is permitted to make out reply to the showcause notice. All contentions are kept open.

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In light of setting aside of the order of adjudication, needless to state, the attachment of bank accounts by way of action for recovery, are set aside.

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NC: 2026:KHC:19613 WP No. 6552 of 2026

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HC-KAR

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