The Court held that where a substantive reply was available on record, it should have been considered before affirming the proposition in the show cause notice.
The Karnataka High Court has quashed an adjudication order under Section 73 and the consequential garnishee notice in Form GST DRC-13, finding that the petitioner's reply to the audit intimation in Form GST ASMT-10 was on record but was not considered before the impugned order was passed [M/s 3 Pace Power System v. State of Karnataka & Ors].
Justice B M Shyam Prasad noted that the petitioner had filed a reply on 19.09.2024 explaining that an SGST figure of Rs. 20,93,839 had been inadvertently entered as Rs. 2,09,38,539 in GSTR-9 due to a clerical error, and that no debit note had been issued during the period. The same explanation was reiterated in a subsequent reply to an inspection.
The petitioner's case was that notices were addressed to its chartered accountant's email ID, and the petitioner was not effectively put on notice of subsequent proceedings. The Court observed that this was not a case of negligence — the explanation was on record and should have been considered.
The adjudication order and garnishee notice were quashed, and the petitioner was directed to file a detailed response to the show cause notice by 27.10.2026.
2026-juristway.com-2938-HC(Karnataka)-GST | High Court of Karnataka | WP No. 30037 of 2026 | 30.09.2026
