GST Demand Quashed on Limitation Issue | HC

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GST demand quashed on limitation issue

Case Details: Bangalore Matics (P.) Ltd. vs. Union of India - [2026] 182 taxmann.com 429 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • Harish Vashisth, Adv. for the Petitioner. 
  • Jeevan J. Neeralgi, Adv. & K. Hema Kumar, AGA for the Respondent.

Facts of the Case

The petitioner was issued a show cause notice under Section 73 of the CGST Act, alleging that excess ITC was claimed in Form GSTR-3B compared to Form GSTR-2A. It did not respond to the notice, and an ex-parte adjudication order was passed confirming the demand along with interest and penalty. The petitioner challenged the order, arguing that the proceedings were barred by limitation and that the notice went unnoticed, thereby preventing the filing of a reply. The matter was accordingly placed before the High Court.

High Court Held

The High Court observed that the issue of limitation depended on the validity of the extension of limitation, which was pending adjudication before the Supreme Court. As the decision would directly affect the legality of the proceedings, the Court held that deciding the matter at that stage would be inappropriate. It was further noted that it would avoid multiplicity of proceedings and conflicting outcomes by awaiting the Supreme Court’s decision. Accordingly, the High Court set aside the demand order passed under Section 73 of the CGST Act and remanded the matter for fresh consideration.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied