10% Deposit Condition: HC Remits GST Matter Back to Tax Authority

The present case has been filed by Bhoo Developers against the tax authorities in the High Court of Karnataka regarding a GST demand.

Background of the present Case

The tax authorities had passed an order under Section 73(9) of the KGST Act, 2017, raising a demand against Bhoo Developers. The order was issued after an audit found alleged non-payment of GST and development charges payable to the landowner.

According to the department, even after several opportunities, the company did not respond to the show-cause notice. As a result, the authority proceeded to confirm the tax demand.

The petitioner before the High Court argued that it failed to reply to the show cause notice due to a genuine and unintentional lapse. The petitioner argued that the order would cause serious financial hardship if it remained in force.

The petitioner requested the court to give another opportunity to respond to the notice and asked for the matter to be sent back to the tax authority for fresh consideration.

The Additional Government Advocate argued that the show cause notice had been properly served. He contended that the company alone was responsible for not participating in the proceedings.

High Court’s Decision

After considering all the merits of the case, the High Court felt that the petitioner should be given one more opportunity to present its case.

As a result, the court stated, “The matter is remitted, providing an opportunity to the petitioner to make a reply to the show cause notice.”

However, the Court imposed a condition that the petitioner has to deposit 10% of the tax demanded before the next date of hearing. Apart from this, the court also directed the petitioner to appear before the authority on 25/05/2026, without waiting for further notice.