M/S X Factor Consulting Private Limited vs. Union Of INDIA
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Cause title — parties, addresses and appearances
ORAL ORDER In this petition, petitioner seeks the following reliefs:
“i) Issue a writ of certiorari or direction in the nature of a writ or certiorari quashing the order passed under section 107(11) of the GST Act dated 07.11.2025 issued by the Respondent No.4 for the Financial Year 2019-20 bearing No. GST. AP. No. 379/2025-26 having Reference No.ZD2911250495580 herein marked as Annexure-A.
ii) Issue a writ of certiorari or direction in the nature of a writ or certiorari quashing the endorsement dated 19.08.2025 passed by the Respondent No.5 for the HC-KAR NC: 2025:KHC:52075 period April 2019 – March 2020 bearing No.LGSTO- 152/ACCT/2025-26 herein marked as Annexure-B.
iii) Issue a writ of certiorari or direction in the nature of a writ or certiorari quashing the order of adjudication passed under Section 73(9) of GST Act by the Respondent No.5 for the period April 2019- March 2020 bearing No. ACCT(LGSTO-152) DRC-07/2024-25/ ORDER-U/s 73/2024-25 having RFN No. MA290824210559) dated 26.08.2024 herein marked as Annexure-C1. iv) Issue a writ in the nature of certiorari and quash FORM GST DRC 07 dated 26.08.2024 passed by the Respondent No.5 herein enclosed and marked as Annexure-C2. v) Issue a writ in the nature of certiorari and quash the show cause notice issued under section 73(1) of the GST Act dated 24.05.2024 for the Financial Year April 2019-March 2020 issued by the Respondent No.5 bearing No.ACCT/LGSTO-152/DRC-01/EXPORT/2024- 25 having RFN No. MA290524138551U herein enclosed and marked as Annexure-D1. vi) Issue a writ in the nature of certiorari and quash the Summary of show cause notice in FORM GST DRC 01 dated 24.05.2024 by the Respondent No.5 having HC-KAR NC: 2025:KHC:52075 RFN No.MA290524138551U herein enclosed and marked as Annexure-D2. vii) Declare that the impugned notification No.56/2023-CT dated 28.12.2023 is illegal and ultra vires the provisions of section 168A of Central goods and services act, 2017 and issue a writ of certiorari or any other appropriate writ or order or direction and quash the impugned Notification No.56/2023-CT dated 28.12.2023 is enclosed and marked as Annexure-E1. viii) Declare that the impugned notification No.24/2023 dated 29.12.2023 is illegal and ultra vires the provisions of section 168A of Central goods and services Act, 2017 and issue a writ of certiorari or any other appropriate writ or order or direction and quash the impugned Notification No.25/2023 dated 29.12.2023 is enclosed and marked as Annexure-E2. ix) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity.”
Heard learned counsel for the petitioner and learned HCGP for the respondent Nos.3, 4 and 5 and learned counsel for respondent Nos.1 and 2 and perused the material on record. HC-KAR NC: 2025:KHC:52075
A perusal of material on record will indicate that pursuant to an intimation at Annexure – G in Form GST DRC-01A dated 17.05.2024, the 5th respondent issued a show-cause notice dated 24.05.2024 under Section 73(1) of the CGST/KGST Act, 2017 alleging that the petitioner had wrongly claimed zero rated turnover for the F.Y. 2019-20. Since the petitioner had not reply to the said Notices, the 5th respondent passed an adjudication order dated 26.08.2024 under Section 73(9) of the CGST / KGST Act confirming a total demand of Rs.5,66,865/- along with interest and Penalty. Thereafter, the 5th respondent initiated recovery proceedings against the petitioner by issuing third party attachment notice to the petitioner’s banker. The petitioner only on receiving the aforesaid third party Notice realized regarding the said ex-parte impugned adjudication order. Aggrieved by the said impugned adjudication order, the petitioner filed an application dated 12.08.2025 for rectification of the impugned order dated 26.08.2024 which was also rejected by the 5th respondent vide impugned endorsement dated 19.08.2025. Aggrieved by the aforesaid orders, the petitioner is before this Court by way of the present petition. HC-KAR NC: 2025:KHC:52075
Learned counsel for the petitioner submits that the said notices were not received by the petitioner and hence, could not submit replies / documents to the show-cause notice and resultantly, could not contest the proceedings. Pursuant to the issuance of third party notice, the petitioner filed an appeal on 16.09.2025 which was dismissed as barred by limitation vide impugned order dated 07.11.2025. It is submitted that since the GST Appellate Tribunal has not been constituted as on today, the petitioner has no option but to approach this Court by way of the present petition interalia contending that the inability and omission on the part of the petitioner to submit reply to the intimation notice and show-cause notice and contest the proceedings was due to bonafide reasons, unavoidable circumstances and sufficient cause and submits that if one more opportunity is provided by setting aside the impugned order, the petitioner would submit a reply to the show-cause notice and contest the proceedings. It is further submitted that the impugned proceedings initiated pursuant to the impugned show cause notice dated 24.05.2024 is barred by limitation under Section 73(10) of the KGST Act and as such, the availability of equivalent, efficacious and alternative remedy by way HC-KAR NC: 2025:KHC:52075 of filing of an appeal under Section 107 of the CGST / KGST Act would not come in the way of the petitioner prosecuting the present petition.
Per contra, learned HCGP for the respondents – revenue submits that the period of limitation has been extended by the respondents vide Notification No.13/2022 dated 05.07.2022, Notification Nos.9 and 56 of 2023 dated 31.03.2023 and 08.12.2023, respectively and as such, it cannot be said that the proceedings are barred by limitation.
Learned counsel for the petitioner would invite my attention to the Petition in Special Leave Appeal (C) No.4240/2025 pending before the Apex Court in order to contend that the validity of the said Notifications are seized by the Apex Court and pending adjudication before the Hon’ble Supreme Court.
In view of the aforesaid facts and circumstances and the submissions made by both sides which will indicate that the validity of the aforesaid Notifications are seized by the Apex Court and which will have an impact / bearing on the impugned proceedings, I am of the view that one more opportunity is required HC-KAR NC: 2025:KHC:52075 to be granted in favour of the petitioner by setting aside the impugned adjudication order and remitting the matter back to the respondents for reconsideration afresh in accordance with law by issuing certain directions.
Under these circumstances, in order to avoid multiplicity of proceedings and to ensure that there are no conflicting orders, I deem it just and appropriate to direct the 2nd respondent to reconsider the matter afresh and pass a fresh adjudication order in accordance with law after disposal of Special Leave to Appeal (C) No.4240/2025 by the Apex Court.
In the result, I pass the following:- ORDER
(i) Petition is hereby allowed subject to payment of cost of Rs.10,000/- to the Karnataka High Court Legal Services Authority, Bengaluru, within a period of six weeks from today.
(ii) The impugned order at Annexure – A, Endorsement at Annexure – B and Order at Annexure - C1 dated 07.11.2025, 19.08.2025 and 26.08.2024, respectively, passed by the respondents are hereby set aside. HC-KAR NC: 2025:KHC:52075 (iii) The matter is remitted back to the 5th respondent for reconsideration afresh and pass a fresh adjudication order in accordance with law after disposal of SLP No.4240/2025 pending before the Apex Court.
(iv) The period between the date of the impugned order i.e., 26.08.2024 and the date on which the Apex Court disposes of the aforesaid SLP No.4240/2025 shall stand excluded for the purpose of limitation. (S.R.KRISHNA KUMAR) JUDGE
SV List No.: 2 Sl No.: 17
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.