Bangalore Matics Private Limited Vs Union of India (Karnataka High Court)
The petitioner challenged an ex parte adjudication order dated 12.03.2024 and the preceding show cause notice dated 08.12.2023 issued under Section 73 of the CGST/KGST Act, 2017 for the tax period 2018–19. The proceedings were initiated on the ground that the petitioner had claimed excess input tax credit in GSTR-3B compared to GSTR-2A. Since no reply was submitted to the show cause notice, the tax authority passed an adjudication order confirming a demand of ₹1,62,13,140 along with interest and penalty, without granting a personal hearing.
Before the Karnataka High Court, the petitioner contended that the notices had gone unnoticed, resulting in the ex parte order, and sought an opportunity to file replies and supporting documents. It was also argued that the proceedings were barred by limitation under Section 73(10) of the KGST Act. The Revenue opposed this, submitting that limitation had been extended through notifications issued in 2022 and 2023. The petitioner further pointed out that the validity of these extension notifications was under consideration before the Supreme Court of India in a pending special leave petition.
The High Court noted that the validity of the limitation-extension notifications was sub judice before the Supreme Court and that the outcome would directly affect the impugned proceedings. To avoid multiplicity of proceedings and conflicting decisions, the Court set aside the adjudication order and remitted the matter back to the tax authority for fresh consideration. The authority was directed to pass a new adjudication order in accordance with law after disposal of the pending special leave petition. The period between the impugned order and the Supreme Court’s decision was directed to be excluded for limitation purposes.
