The Karnataka High Court held that passing an ex parte adjudication order under Section 73 of the CGST Act without properly serving the Show Cause Notice (SCN) to the taxpayer’s registered email address deprives the taxpayer of a genuine opportunity to be heard.
The Court observed that such action violates the principles of natural justice, as a taxpayer cannot effectively defend their case without receiving prior notice of the proceedings.
M/s Paxal Fuel Corporation, a registered partnership entity, filed the case, disputing a hefty demand of exceeding Rs 1,13,40,548/- (inclusive of tax, interest and penalty).
Under Articles 226/227 of the Constitution, the firm approached the High Court requesting for cancelling the adjudication order dated December 2025 and restoration of the action to the stage of SCN to allow the firm to provide its books of accounts.
In the preliminary hearing, the applicant’s representative, YC Shivakumar, pointed out a crucial procedural lapse.
While the impugned adjudication ruling shows that the SCN dated September 29, 2025, was sent to the registered email ID of the applicant, the applicant was categorical in arguing that no such email was received before the granting of the order.
SCN was placed on the GST portal only after the ex parte adjudication order was dictated, thereby not furnishing any chance for the taxpayer to defend itself.
The representative of the Deputy Commissioner of Commercial Taxes (Audit), Sri K. Hemakumar, Additional Government Advocate, accepted notice for the respondent.
He expressed that various attempts had been made by the assessing officer to contact the applicant on the provided telephone numbers; however, these were not appropriate. The department had tried to contact the taxpayer, and on not answering, the ex parte order was appropriate.
The High Court considered the grievance of the applicant. “The entire basis of the ex parte adjudication was the alleged non-response by the petitioner to the SCN,” Justice Shyam Prasad stated.
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Therefore, the ex parte adjudication is fundamentally incorrect because the applicant alleged that the SCN was not emailed to them before the order.
The taxpayer should be provided a real opportunity to be heard before he is needed to reply to a huge demand of more than Rs 1.13 crore, the Court stated.
Dialling phone numbers alone is not a substitute for the correct service of SCN through registered email before the conclusion of adjudication.
The single bench quashed an ex parte order of adjudication given u/s 73(9) of the Central Goods and Services Tax (CGST) Act, 2017.
The court partly accepted the petition and found a violation of the principles of natural justice. The December 2025 order was cancelled, and the proceedings were restored to the respondent authority.
The applicant was furnished with a chance to submit a thorough response to the September 2025 Show Cause Notice (SCN) by July 6, 2026, with all the substantive questions remaining open for fresh and fair consideration.
| Case Title | M/S Paxal Fuel Corporation vs. The Deputy Commissioner of Commercial Taxes |
| Case No. | No. 16096 OF 2026 (T-RES) |
| For Petitioner | SRI. Shivakumar |
| For Respondent | SRI.K. Hema Kumar |
| Karnataka High Court | Read Order |
