Delayed GST Appeal to Be Heard on Merits Without Limitation Objection: Karnataka HC

Aditya Security Force Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)

Material Facts

The petitioner filed a writ petition challenging two ex parte adjudication orders dated 21.05.2025 passed under Section 73(9) of the Goods and Services Tax Act, 2017 for the tax periods 2021-22 and 2022-23, along with the corresponding Show Cause Notices dated 08.04.2024.

The petitioner stated that, despite issuance of the show cause notices, it could not appear and contest the proceedings, resulting in the impugned adjudication orders.

The petitioner further contended that the total tax, interest and penalty specified in the show cause notices differed from those in the adjudication orders, allegedly contrary to Section 73(7) of the Act.

It was also submitted that the petitioner, a small provider of security services, was not familiar with the GST portal and lacked proper advice regarding tax liability. The petitioner asserted that, under the notifications dated 28.06.2017 and 31.12.2017, as applicable to its business, GST was payable by the recipient of the services on a reverse charge basis, whereas the adjudicating authority had levied tax on the petitioner as the service provider.

Procedural History

Following the show cause notices dated 08.04.2024, adjudication orders under Section 73(9) were passed on 21.05.2025. Instead of filing a statutory appeal under Section 107(4), the petitioner approached the High Court. The petitioner acknowledged that the period prescribed for filing the appeal had expired and sought permission to avail the appellate remedy.

Legal Issue(s)

• Whether the petitioner should be permitted to file a delayed appeal against the adjudication orders.
• Whether the contentions regarding reverse charge liability and the alleged discrepancy between the show cause notices and adjudication orders required consideration by the appellate authority.

Relevant Statutory Provisions

• Sections 73(7), 73(9) and 107(4) of the Goods and Services Tax Act, 2017.

Petitioner’s Submissions

The petitioner submitted that:

• It could not participate in the adjudication proceedings due to lack of familiarity with the GST portal.
• The adjudication orders contained tax, interest and penalty figures different from those mentioned in the show cause notices, contrary to Section 73(7) of the Act.
• As a supplier of security services, the applicable notifications required tax to be paid by the recipient on a reverse charge basis, but tax had instead been levied on the petitioner.
• Since the limitation period for filing an appeal had expired, the Court should permit the petitioner to avail the appellate remedy.

Respondents’ Submissions

The respondents submitted that the adjudication orders dated 21.05.2025 were appealable under Section 107(4) of the Act.

Court’s Findings and Reasoning

The High Court observed that, in earlier cases, it had permitted parties to avail the appellate remedy despite expiry of limitation, while clarifying that such orders were rendered on the peculiar facts of those cases and were not to be treated as precedents.

The Court noted that the petitioner questioned the levy itself on the ground that GST was payable by the recipient under the reverse charge mechanism, which required factual adjudication. The Court also noted the petitioner’s contention that the adjudication orders were contrary to Section 73(7) of the Act.

Considering the peculiar facts of the case, the Court held that it was appropriate to permit the petitioner to avail the statutory appellate remedy.

Final Ruling

The Karnataka High Court disposed of the writ petition by permitting the petitioner to file an appeal within three weeks from the date of the order.

The Court directed that, if the appeal is filed within the stipulated period, the appellate authority shall consider it without raising any objection on limitation.

The Court clarified that the order was passed having regard to the peculiar factual matrix of the case and should not be treated as a precedent.

Cases Discussed

• Prestige, NottingHill Investments, Anjanadri Layout, Kanakapura Road, Near Konanakunte, Doddakallsandra, Bengaluru v. Union of India and others (Karnataka High Court), 2026(114) KGST L.J.424 (HC)
• Yalappa R Patil Vs. The Assistant Commissioner of Commercial Taxes (Karnataka High Court), Order dated 25.09.2025 in W.A.No.100608/2025 : NC: 2025:KHC-D:13250-DB
• Jai Hind Enterprises Vs. The Assistant Commissioner of Commercial Taxes (Karnataka High Court), Order dated 21.01.2025 in W.P.No.107549/2024 : NC: 2025:KHC-D:1034

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The present writ petition is filed seeking for the following reliefs:

“This Hon’ble’ High Court may be pleased to issue a Writ of Certiorari or a direction in the nature of Writ of certiorari quashing the exparte impugned Orders both dated 21.05.2025 in Nos. ACCT(Audit)-2/HPT/GST-ADJN/Order-/2025-26/T and ACCT(Audit)-2/HPT/GST-ADJN/Order-/2025-26/T for the tax periods 2021-22 & 2022-23 passed by the 1^st Respondent (Annexure- C & D) in the Petitioner’s case.

This Hon’ble’ High Court may be pleased to issue a Writ of Certiorari or a direction in the nature of Writ of certiorari quashing the Show Cause Notices in Form GST DRC-01 both dated 08.04.2024 in Nos. CTO/ENF/HPT/U/S73/15/2024-25/7775 & CTO/ENF/HPT/U/S73/16/2024-25/7776 issued by the 2^nd Respondent for the tax periods 2021-22 & 2022-23 (Annexure – A & Al) in the Petitioner’s Case.

This Hon’ble’ High may be pleased to issue such other Writ or Writs or Directions in the nature of a Writ as this Hon’ble’ High Court may deem with fit to grant in the facts and circumstances of the Petitioner’s case.”

2. It is the case of the petitioner that consequent to the show cause notices dated 08.04.2024, issued for the tax period April- 2021 to March-2022 as also April- 2022 to March-2023 (Annexures-A and Al respectively), the petitioner was unable to appear to contest the same; as a result of which, order of adjudication under Section 73(9) of the Goods and Services Act, 2017′ was passed with respect to the said period i.e., April-2021 to March-2022 and April-2022 to March-2023 vide Annexures-C and D, respectively.

3. It is further contended that the amount of total tax, interest and penalty mentioned in the notices and in the orders are different, which are contrary to Section 73(7) of the Act. Reliance is placed on a Co-ordinate Bench of this Court in the case of Prestige, NottingHill Investments, Anjanadri Layout, Kanakapura Road, Near Konanakunte, Doddakallsandra, Bengaluru v. Union of India and others².

4. It is further submitted that the petitioner, being a small operator of supplying security services, was not updated with the operations of the systems and hence, was not in a position to open the portal and attend to the notices. That, the petitioner had no proper advice with respect to the tax that was leviable. In the said context, it is submitted that having regard to the notification dated 28.06.2017 (Annexure-S to the writ petition), which has been modified vide notification dated 31.12.2017 (Annexure-T to the writ petition), the tax leviable under the provisions of the Act were to be paid on reverse charge basis by the recipient of the service. That the business of the petitioner is covered under the notification dated 31.12.2018. The respondent No.1-Assistant Commissioner while noticing that the petitioner had provided security services, levied tax on the petitioner, who had provided the services and was not the recipient of the services.

5. Learned AGA submits that the orders dated 21.05.2025 passed under Section 73(9) of the Act are appealable under Section 107(4) of the Act. However, learned counsel for the petitioner submits that the time period contemplated for filing of the appeal having expired, relying on the judgment of a Division Bench of this Court in the case of Yalappa R Patil Vs. The Assistant Commissioner of Commercial Taxes³ as well as a Co-ordinate Bench of this court in the case of Jai Hind Enterprises Vs. The Assistant Commissioner of Commercial Taxes⁴ an opportunity be afforded to the petitioner to avail the remedy of appeal as provided under the Act.

6. It is noticed that this Court on earlier occasions, as cited by the learned counsel for the petitioner, having regard to the peculiar facts and circumstances of the said cases, has permitted the availment of the appellate remedy while also noticing that the said orders were not to be treated as a precedent.

7. In the peculiar facts of the present case, since the petitioner did not avail the remedy of filing an appeal and having regard to the fact that the levy of tax on the petitioner itself is sought to be impugned on the ground that the tax was to be paid on reverse charge basis by the recipient of the services, which aspect requires a factual adjudication of the matter as well as the contention of the petitioner that the impugned orders are contrary to Section 73(7) of the Act, it is expedient that the petitioner be permitted to avail the appeal remedy in a recipient of services. However, it is expedient that the petitioner be permitted to avail the appeal within a period of three weeks from date. Accordingly, the present writ petition is disposed of by permitting the petitioner to avail the appeal remedy.

8. If such a remedy is availed within three weeks from date, the said appeal shall be considered by the appellate authority without raising any objection on limitation.

9. It is made clear that this order is passed having regard to the peculiar factual matrix of the present case and may not be treated as a precedent.

Notes:

¹ Hereinafter referred to as the “Act of 2017-KGST/CGST)

² 2026(114) KGST L.J.424 (HC)

³ Order dated 25.09.2025 in W.A.No.100608/2025 : NC: 2025:KHC-D:13250-DB

⁴ Order dated 21.01.2025 in W.P.No.107549/2024 : NC: 2025:KHC-D:1034