Facts of the Case

M/s. JMJ Contractors was subjected to an audit for FY 2019-20 pursuant to a notice dated 15.07.2023 under Section 65 of the CGST/KGST Act, culminating in an Audit Report dated 15.05.2024 under Section 65(6). A show cause notice dated 30.05.2024 under Section 73(1), followed by two reminders, was issued calling upon the petitioner to reply, but the petitioner did not respond, leading to an ex parte Order-in-Original dated 06.08.2024. The petitioner's subsequent rectification request was not considered, and its appeal filed on 08.04.2025 before the Joint Commissioner (Appeals) was rejected on 14.05.2025 for delay and limitation.

Issues Involved

  1. Whether the ex parte adjudication order, passed on notices the petitioner claims not to have received, was liable to be set aside to allow the petitioner an opportunity to reply.
  2. Whether proceedings initiated pursuant to the show cause notice dated 30.05.2024 were barred by limitation under Section 73(10), in light of the pending Supreme Court challenge to the validity of the notifications extending such limitation under Section 168A.

Petitioner's Arguments

  • The petitioner did not receive the notices issued by the respondents and hence could not submit a reply/documents, resulting in the ex parte order; an opportunity ought to be given to file a reply after setting aside the order.
  • The impugned proceedings were barred by limitation under Section 73(10) of the KGST Act, since the validity of the notifications extending the limitation period issued under Section 168A was pending challenge before the Supreme Court in SLP(C) No.4240/2025, and the availability of an alternate appellate remedy would not bar the writ petition on this ground.

Respondent's Arguments

  • The HCGP submitted that the period of limitation had been validly extended by Notification No.13/2022 dated 05.07.2022 and Notification Nos.9 and 56 of 2023 dated 31.03.2023 and 08.12.2023 respectively, and hence the proceedings could not be said to be barred by limitation.

Court Order / Findings

  • The Court noted that the validity of the very notifications on which the impugned proceedings' timeliness depended was seized before the Supreme Court in SLP(C) No.4240/2025, and this would have a direct bearing on the impugned proceedings.
  • To avoid multiplicity of proceedings and conflicting orders, the Court granted the petitioner one more opportunity, setting aside the impugned adjudication order and remitting the matter for reconsideration afresh after the Supreme Court decides the pending SLP.
  • The petition was allowed subject to the petitioner paying costs of Rs.10,000/- to the Karnataka High Court Legal Services Authority within six weeks; the Order-in-Original dated 06.08.2024 and Order-in-Appeal dated 14.05.2025 were set aside.
  • The intervening period was directed to be excluded for limitation purposes, and the petitioner was directed to appear before the respondent on 28.11.2025 to file its reply to the show cause notice.

Important Clarification

  • Where the very validity of the notifications extending limitation under Section 168A of the CGST/KGST Act for issuing Section 73 orders is pending adjudication before the Supreme Court, a High Court may set aside a concluded ex parte assessment and defer fresh adjudication until the Apex Court rules on the notifications' validity — while excluding the intervening period from limitation and imposing costs where the taxpayer's own default contributed to the ex parte order.

Sections Involved

  • Section 65 of the CGST/KGST Act, 2017 — governs audit by tax authorities.
  • Section 73 of the CGST/KGST Act, 2017 — determination of tax not paid/short paid, with sub-section (10) prescribing the limitation period.
  • Section 168A of the CGST Act, 2017 — empowers extension of time limits in special circumstances, the validity of notifications issued thereunder being under Supreme Court challenge.
  • Section 107 of the CGST/KGST Act, 2017 — the appellate remedy, held not to be an absolute bar given the pending constitutional challenge.

Decision – In Favour of

Assessee (procedurally) — the ex parte order and appellate rejection were set aside, with fresh adjudication deferred pending the Supreme Court's ruling.

Case Details

High Court of Karnataka at Bengaluru; WP No. 24876 of 2025 (T-RES); Coram: Justice S.R. Krishna Kumar; Order dated 17.10.2025.

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