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Bangalore Matics Private Limited Vs Union of India (Karnataka High Court)

Date: December 17, 2025

Court: High Court
Bench: Karnataka
Type: Writ Petition
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Subject Matter

Ex-parte Order Set Aside, Remitted for Reconsideration Pending Apex Court's Notification Validity Decision

Summary

The petition is allowed, setting aside the ex-parte adjudication order and remitting the matter for fresh consideration. This decision is contingent on the outcome of a Special Leave Petition before the Apex Court, which is examining the validity of Notifications that extended the limitation period for issuing show-cause notices. The period between the impugned order and the Apex Court's decision will be excluded for limitation purposes.

Summary of Facts and Dispute:
  1. Impugned Action: The 4th respondent issued a show-cause notice dated 08.12.2023 under Section 73(1) of the CGST/KGST Act, 2017, for the tax period 2018-19, alleging excess ITC claimed in GSTR 3B compared to GSTR 2A. Subsequently, an ex-parte adjudication order dated 12.03.2024 was passed under Section 73(9), confirming a total demand of Rs. 1,62,13,140/- along with interest and penalty, without granting a personal hearing to the petitioner.
  2. Petitioner's Argument: The petitioner argued that the notices went unnoticed, preventing them from submitting a reply or documents, which led to the impugned ex-parte order. They further contended that the proceedings initiated by the show-cause notice dated 08.12.2023 were barred by limitation under Section 73(10) of the KGST Act.
  3. Core Question of Law: Whether the impugned show-cause notice and subsequent adjudication order, issued based on Notifications extending the limitation period, are valid given that the legality of these Notifications is currently sub judice before the Apex Court.
Key Legal Issues & Findings:
Impact of Apex Court's Adjudication on Limitation Extension Notifications

The Court considered the submissions of both parties, acknowledging that the validity of the Notifications extending the period of limitation (Notification No. 9/2023-CT, Notification No. 56/2023-CT, and corresponding State Notifications) is currently sub judice before the Apex Court in Special Leave Appeal (C) No. 4240/2025.

  • Necessity of Reconsideration: The pendency of the Apex Court's decision on the validity of the limitation-extending Notifications directly impacts the legality of the impugned proceedings and the ex-parte order.
  • Avoidance of Multiplicity: To prevent conflicting orders and multiplicity of proceedings, the Court deemed it just and appropriate to grant the petitioner another opportunity and direct reconsideration of the matter after the Apex Court's decision.
  • Exclusion of Period: The period between the date of the impugned order (12.03.2024) and the date of the Apex Court's disposal of the SLP shall be excluded for limitation purposes.
Ruling:
  1. Outcome: The petition is allowed, and the impugned order at Annexure-A dated 12.03.2024 passed by the 4th respondent is set aside.
  2. Directions: The matter is remitted back to the 4th respondent for reconsideration afresh and to pass a fresh adjudication order in accordance with the law, after the disposal of SLP No. 4240/2025 pending before the Apex Court.
  3. Liberty: The period between the date of the impugned order (12.03.2024) and the date on which the Apex Court disposes of SLP No. 4240/2025 shall stand excluded for the purpose of limitation.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

In this petition, the petitioner seeks the following reliefs:

“a) Issue a writ of certiorari or any other appropriate writ, order or direction, quashing the impugned Order-in-Original, Order No. JACCT/LGSTO-27/DRC07/115/2023-24, dated 12.03.2024 Annexure-A, and the Show Cause Notice ACCT/LGSTO-27/M2/2A Vs 3B/2018-19, dated 08.12.2023, at Annexure-B;

b) Issue a writ of certiorari or any other appropriate writ, order or direction, quashing the impugned Notification No. 9/2023-CT dated 31.03.2023 and 56/2023-CT dated 28.12.2023, at Annexure C and Annexure-D respectively, and consequently the corresponding State notifications, Notification No. 06/2023, FD CSL 2023 dated 06.04.2023 and Notification No. 25/2023, FD 20 CSL 2023, dated 29.12.2023, at Annexure-E and Annexure-F, respectively, holding them as ultra vires, arbitrary, and without jurisdiction;

or, the Hon’ble Court, in its wisdom and magnanimity, may grant any such other order(s), as this Hon’ble Court deems fit upon the above enumerations of law, facts and circumstance in the interest of justice.”

2. Heard learned counsel for the petitioner and learned AGA for the respondents and perused the material on record.

3. A perusal of material on record will indicate that pursuant to intimations in Form GST DRC-01A dated 28.11.2023 for tax period 2018-19, the 4th respondent issued a show-cause notice dated 08.12.2023 under Section 73(1) of the CGST/KGST Act, 2017 for tax period 2018-19, alleging that there is more ITC claimed in GSTR 3B when compared to GSTR 2A. Since the petitioner had not replied to the said Notices, the 4th respondent passed adjudication order dated 12.03.2024 under Section 73(9) of the CGST /KGST Act for tax period 2018-19 confirming a total demand of Rs.1,62,13,140/- along with interest and Penalty, without granting an opportunity of personal hearing to the petitioner. Aggrieved by the aforesaid order, the petitioner is before this Court by way of the present petition.

4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the aforesaid notices went unnoticed by the petitioner and hence the petitioner could not submit reply/documents to the same which has culminated in the impugned ex-parte order and if an opportunity is given to the petitioner to file reply/documents to the said notices by setting aside the impugned ex-parte order the petitioner would do so and the 4th respondent may be directed to directed to pass fresh order after considering the replies/ documents filed by the petitioner. It is further submitted that the impugned proceeding initiated pursuant to the impugned show cause notice dated 08.12.2023 is barred by limitation under Section 73(10) of the KGST Act and on this score also the impugned orders are liable to be set aside.

5. Per contra, learned AGA for the respondents – Revenue submits that the period of limitation has been extended by the respondents vide Notification No. 13/2022 dated 05.07.2022, Notification Nos. 9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively and as such, it cannot be said that the proceedings are barred by limitation.

6. Learned counsel for the petitioner would invite my attention to the Petition in Special Leave Appeal (C) No. 4240/2025 pending before the Apex Court in order to contend that the validity of the said Notifications are seized by the Apex Court and pending adjudication before the Hon’ble Supreme Court.

7. In view of the aforesaid facts and circumstances and the submissions made by both sides which will indicate that the validity of the aforesaid Notifications are seized by the Apex Court and which will have an impact/bearing on the impugned proceedings. I am of the view that one more opportunity is required to be granted in favour of the petitioner by setting aside the impugned orders and remitting the matter back to the 4th respondent for reconsideration afresh, in accordance with law, by issuing certain directions.

8. Under these circumstances, in order to avoid multiplicity of proceedings and to ensure that there are no conflicting orders, I deem it just and appropriate to direct the 4th respondent to reconsider the matter afresh and pass a fresh adjudication order in accordance with law after disposal of Special Leave to Appeal (C) No.4240/2025 by the Apex Court.

9. In the result, I pass the following:-

ORDER

(i) Petition is hereby allowed.

(ii) The impugned order at Annexure-A dated 12.03.2023 passed by the 4th respondent N is hereby set aside.

(iii) The matter is remitted back to the 4th respondent for reconsideration afresh and pass a fresh adjudication order in accordance with law after disposal of SLP No.4240/2025 pending before the Apex Court.

(iv) The period between the date of the impugned order i.e.,12.03.2024 and the date on which the Apex Court disposes of the aforesaid SLPNo.4240/2025 shall stand excluded for the purpose of limitation.