Karnataka HC Quashes DRC-13 Recovery Notice and Allows Service Tax Appeal

Droplet Offshore Services Private Limited Vs Assistant Commissioner of Central Tax (Karnataka High Court)

Summary: The Karnataka High Court considered a writ petition filed by M/s Droplet Offshore Services Private Limited challenging a Recovery Notice in Form DRC-13 dated 23.03.2026 issued to HDFC Bank. The petitioner sought quashing of the recovery notice, furnishing of the Order-in-Original/Adjudication Order dated 27.03.2024, liberty to file an appeal under Section 85 of the Finance Act, 1994, and protection against recovery until the appellate period expired. The petitioner’s grievance was that the Adjudication Order had been sent to its old registered address even though the change in registered address had been uploaded in 2023, resulting in denial of the opportunity to pursue the statutory appellate remedy. During the proceedings, the respondent submitted that the Adjudication Order dated 27.03.2024 had subsequently been uploaded and a copy furnished to the petitioner’s counsel.

The respondent could not dispute that the petitioner had uploaded the change of address and that the Adjudication Order had been sent to the old address. The Court observed that even if the petitioner had become aware of the Show Cause Notice and participated in the proceedings, such circumstances could not by themselves establish knowledge of the Adjudication Order as of its date. Since the order had admittedly been sent to an address from which the petitioner had moved, the Court recognised that intervening circumstances could support the petitioner’s case that it was unaware of the order until service of the impugned garnishee notice.