GST Payer fails to Reply to SCN on Wrongful Availment of ITC: Karnataka HC remits Matter to stage of SCN [Read Order]

The High Court of Karnataka at Bengaluru set aside an order and remitted the matter as the confirmed order ignored the non-participation of the petitioner, in the proceedings for wrongful availment of Input Tax Credit (ITC).

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The Superintendent of Central Tax adjudicated the case observing that the taxpayer failed to make out a reply to the showcause notice (SCN) and proceeded to complete the adjudication on the basis of records and material available. The central issue was the wrongful availment of input tax credit.

In the appeal proceedings before the Additional Commissioner of Central Tax and Commissioner of Central Tax-GST, opportunity of personal hearing was provided but was not availed. The Authority then recorded that the order does not require interference.

The counsel for the petitioner submits that the absence of participation from the petitioner may be condoned and matter be remitted for fresh consideration as the confirmed order is ex-parte in nature.

It was further submitted that without a reply to the SCN, there would be no purpose in remitting the matter to appellate authority.

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The opposing counsel submitted that the petitioner is not diligent in prosecution and the remitted matter needs to be put on terms, if so decided.

The High Court deemed it proper to set aside the confirmed order due to the non-participation of the petitioner.

The court set aside the order and remitted the matter to the stage of reply to the show cause notice.

Justice S. Sunil Dutt Yadav remitted the matter to be heard before the bench of the Commissioner of Central Tax on 22.04.2026.

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