Ex Parte ITC Remand

In a procedural fairness-driven ruling, the Karnataka High Court has set aside both the adjudication and appellate orders where Input Tax Credit (ITC) was denied ex-parte. 

Recognizing that the taxpayer failed to participate at multiple stages, the Court nevertheless prioritized principles of natural justice and remanded the matter to the stage of reply to the show cause notice.

The ruling underscores that even repeated non-appearance does not justify sustaining orders where effective adjudication on merits is absent.

However, the Court balanced equities by preserving the revenue’s position,amounts already paid remain subject to final adjudication.