Full Judgment Text
- 1 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 24 DAY OF MARCH, 2026
BEFORE
THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
WRIT PETITION NO. 6895 OF 2026 (T-RES)
BETWEEN:
M/S DIRT MANIA OUTDOOR ADVENTURES PVT. LTD.,
NO.145, P14, OFF KANAKAPURA ROAD,
NELGULI VILLAGE,
BENGALURU-560082
REPRESENTED BY ITS
AUTHORIZED SIGNATORY.
…PETITIONER
(BY SRI. S GURU PRASANNA., ADVOCATE)
AND:
1. UNION OF INDIA
THROUGH THE SECRETARY,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
NORTH BLOCK, NEW DELHI.
Digitally
signed by
VIJAYA P
Location:
HIGH COURT
OF
KARNATAKA
2. THE ASSISTANT COMMISSIONER OF CENTRAL TAX,
DIVISION VI,
BENGALURU WEST COMMISSIONERATE,
ST
1 FLOOR, TTMC COMPLEX,
BMTC BUS STAND, BANASHANKARI,
BENGALURU-560 070
…RESPONDENTS
(BY SRI. JEEVAN J NEERALAGI., ADVOCATE)
THIS WP IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECT, SETTING
ASIDE THE IMPUGNED ORDER NO.86/2024-25 DATED
15.05.2024 (HEREINAFTER REFERRED TO AS IMPUGNED
ORDER) ISSUED BY ASSISTANT COMMISSIONER OF CENTRAL
TAX, ANTI EVASION, GST WEST COMMISSIONERATE
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NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
PROPOSING SERVICE TAX DEMAND OF RS.33,66,922/- ALONG
WITH APPLICABLE INTEREST U/S 75 AND PENALTY U/S 78
PRODUCED HEREWITH AS ANNEXURE-A AS BEING ILLEGAL,
ARBITRARY, WITHOUT JURISDICTION, AND VIOLATIVE OF THE
PRINCIPLES OF NATURAL JUSTICE.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
ORAL ORDER
Petitioner has challenged the order in original at
Annexure-A whereby the authorities concerned after
adjudication have raised a demand of service tax.
2. Learned counsel for the petitioner submits that
the authorities have adjudicated on the basis of inputs
received from CBDT and taking note of the declaration in
the income tax returns. It is further submitted that in
matters identical to the one on hand where the authorities
have adjudicated and raised demand relating to service
tax by virtue of inputs received from CBDT and the
declaration in the income tax returns, this Court has been
remitting the matter back for reconsideration after setting
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NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
aside the order of adjudication including as per the order
passed in W.P.No.11154/2023.
3. It is further submitted that the proceedings
have culminated in an ex-parte order and if the petitioner
is granted an opportunity, they would meet the grounds
raised in the show cause notice and would demonstrate
that not only that the service is exempt in terms of the
notification No.25/2012-ST but also the demand is barred
by limitation.
4. Perused the order dated 03.07.2024 passed in
W.P.No.11154/2023 and connected petitions.
5. This Court while disposing of the said petitions
by remanding it to the stage of reply to the show cause
notice had made certain observations to be kept in mind
by the concerned officials. The observations made from
para-10 onwards reads as follows:-
10. The officers while disposing off the petitions to
keep in mind the following:
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WP No. 6895 of 2026
HC-KAR
1) Whether petitioners do not qualify
under Section 65B(44) of the Finance
Act, 1994 ?
2) Whether services are covered under
negative list ?
3) Whether services are covered under
the exemption list under the
Notification No.25/2012-ST dated
28.06.2012 or under any other
applicable Notifications?
4) Whether the person is liable to remit
service tax in terms of Rule 2 (1) (d)
read with applicable notification?
5) Whether claims are barred by
limitation in terms of the law laid
down by the Apex Court?
11. It is also clarified that disposal of present
petitions must not be construed as having
adjudicated any of the contentions including
jurisdiction. All contentions of both sides on merits
are kept open.
12. Needless to state, upon conclusion of
proceedings, if any of the petitioners are still
aggrieved, legal remedies are kept open. It is also
clarified that wherever, replies to show-cause notice
have not been made out, the same may be filed
upon matter being relegated as noticed above.
13. Accordingly, the following:
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NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
ORDER
In light of observations made above, the writ
petitions relating to challenge to show-cause notice,
such matters will stand relegated to the officers to
be designated in terms of the observations made in
para 8 above, at the same stage. Accordingly, such
of the petitions at Sl.No.1 to 5 in Column No.1 of
the table relating to challenge to show-cause notice
are disposed off.
Insofar as such writ petitions as detailed in Column
2 of the table relating to challenge to Orders-in-
Original, in light of the discussion made above, the
Orders-in-Original stand set aside and the matters
are relegated to the Officers to be designated to be
reconsidered from the stage of show-cause notice.
Accordingly, such of the petitions at Sl.No.1 to 35 in
Column No.2 of the table relating to challenge to
Orders-in-Original are disposed off.
The petitioners who are now relegated before the
authorities concerned are at liberty to file their
pleadings within a reasonable time as may be fixed
by the Officers concerned. Wherever the matters
are pending in appeal in light of the arrangement
that is made, petitioners to file a memo for
withdrawal of appeal and accordingly, the orders-in-
original in question would also receive the same
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WP No. 6895 of 2026
HC-KAR
treatment, i.e. be set aside as per the directions
made above.
Wherever demands have been made pursuant to the
impugned orders, such proceedings are also set
aside."
6. In light of the same, the order-in-original at
Annexure-A is set aside. The matter is remitted to the
stage of reply to the show cause notice. The Authorities to
take note of the observations made in the order dated
03.07.2024 passed in W.P.No.11154/2023 and connected
petitions as extracted supra and in specific to the
observations at Para 10 of the order as may be applicable.
7. In light of the specific assertion that the copy of
the show cause notice was not communicated to the
petitioner, the respondent authorities to furnish copy of
the show cause notice to the petitioner and the petitioner
would be at liberty to make out reply to the said show
cause notice.
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8. Petitioner to appear before the respondent -
Authority without further notice on 21.04.2026.
9. Accordingly, the petition is disposed of . All
contentions are kept open.
SD/-
(S SUNIL DUTT YADAV)
JUDGE
VP
List No.: 1 Sl No.: 17
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 24 DAY OF MARCH, 2026
BEFORE
THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
WRIT PETITION NO. 6895 OF 2026 (T-RES)
BETWEEN:
M/S DIRT MANIA OUTDOOR ADVENTURES PVT. LTD.,
NO.145, P14, OFF KANAKAPURA ROAD,
NELGULI VILLAGE,
BENGALURU-560082
REPRESENTED BY ITS
AUTHORIZED SIGNATORY.
…PETITIONER
(BY SRI. S GURU PRASANNA., ADVOCATE)
AND:
1. UNION OF INDIA
THROUGH THE SECRETARY,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
NORTH BLOCK, NEW DELHI.
Digitally
signed by
VIJAYA P
Location:
HIGH COURT
OF
KARNATAKA
2. THE ASSISTANT COMMISSIONER OF CENTRAL TAX,
DIVISION VI,
BENGALURU WEST COMMISSIONERATE,
ST
1 FLOOR, TTMC COMPLEX,
BMTC BUS STAND, BANASHANKARI,
BENGALURU-560 070
…RESPONDENTS
(BY SRI. JEEVAN J NEERALAGI., ADVOCATE)
THIS WP IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA PRAYING TO DIRECT, SETTING
ASIDE THE IMPUGNED ORDER NO.86/2024-25 DATED
15.05.2024 (HEREINAFTER REFERRED TO AS IMPUGNED
ORDER) ISSUED BY ASSISTANT COMMISSIONER OF CENTRAL
TAX, ANTI EVASION, GST WEST COMMISSIONERATE
- 2 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
PROPOSING SERVICE TAX DEMAND OF RS.33,66,922/- ALONG
WITH APPLICABLE INTEREST U/S 75 AND PENALTY U/S 78
PRODUCED HEREWITH AS ANNEXURE-A AS BEING ILLEGAL,
ARBITRARY, WITHOUT JURISDICTION, AND VIOLATIVE OF THE
PRINCIPLES OF NATURAL JUSTICE.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV
ORAL ORDER
Petitioner has challenged the order in original at
Annexure-A whereby the authorities concerned after
adjudication have raised a demand of service tax.
2. Learned counsel for the petitioner submits that
the authorities have adjudicated on the basis of inputs
received from CBDT and taking note of the declaration in
the income tax returns. It is further submitted that in
matters identical to the one on hand where the authorities
have adjudicated and raised demand relating to service
tax by virtue of inputs received from CBDT and the
declaration in the income tax returns, this Court has been
remitting the matter back for reconsideration after setting
- 3 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
aside the order of adjudication including as per the order
passed in W.P.No.11154/2023.
3. It is further submitted that the proceedings
have culminated in an ex-parte order and if the petitioner
is granted an opportunity, they would meet the grounds
raised in the show cause notice and would demonstrate
that not only that the service is exempt in terms of the
notification No.25/2012-ST but also the demand is barred
by limitation.
4. Perused the order dated 03.07.2024 passed in
W.P.No.11154/2023 and connected petitions.
5. This Court while disposing of the said petitions
by remanding it to the stage of reply to the show cause
notice had made certain observations to be kept in mind
by the concerned officials. The observations made from
para-10 onwards reads as follows:-
10. The officers while disposing off the petitions to
keep in mind the following:
- 4 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
1) Whether petitioners do not qualify
under Section 65B(44) of the Finance
Act, 1994 ?
2) Whether services are covered under
negative list ?
3) Whether services are covered under
the exemption list under the
Notification No.25/2012-ST dated
28.06.2012 or under any other
applicable Notifications?
4) Whether the person is liable to remit
service tax in terms of Rule 2 (1) (d)
read with applicable notification?
5) Whether claims are barred by
limitation in terms of the law laid
down by the Apex Court?
11. It is also clarified that disposal of present
petitions must not be construed as having
adjudicated any of the contentions including
jurisdiction. All contentions of both sides on merits
are kept open.
12. Needless to state, upon conclusion of
proceedings, if any of the petitioners are still
aggrieved, legal remedies are kept open. It is also
clarified that wherever, replies to show-cause notice
have not been made out, the same may be filed
upon matter being relegated as noticed above.
13. Accordingly, the following:
- 5 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
ORDER
In light of observations made above, the writ
petitions relating to challenge to show-cause notice,
such matters will stand relegated to the officers to
be designated in terms of the observations made in
para 8 above, at the same stage. Accordingly, such
of the petitions at Sl.No.1 to 5 in Column No.1 of
the table relating to challenge to show-cause notice
are disposed off.
Insofar as such writ petitions as detailed in Column
2 of the table relating to challenge to Orders-in-
Original, in light of the discussion made above, the
Orders-in-Original stand set aside and the matters
are relegated to the Officers to be designated to be
reconsidered from the stage of show-cause notice.
Accordingly, such of the petitions at Sl.No.1 to 35 in
Column No.2 of the table relating to challenge to
Orders-in-Original are disposed off.
The petitioners who are now relegated before the
authorities concerned are at liberty to file their
pleadings within a reasonable time as may be fixed
by the Officers concerned. Wherever the matters
are pending in appeal in light of the arrangement
that is made, petitioners to file a memo for
withdrawal of appeal and accordingly, the orders-in-
original in question would also receive the same
- 6 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
treatment, i.e. be set aside as per the directions
made above.
Wherever demands have been made pursuant to the
impugned orders, such proceedings are also set
aside."
6. In light of the same, the order-in-original at
Annexure-A is set aside. The matter is remitted to the
stage of reply to the show cause notice. The Authorities to
take note of the observations made in the order dated
03.07.2024 passed in W.P.No.11154/2023 and connected
petitions as extracted supra and in specific to the
observations at Para 10 of the order as may be applicable.
7. In light of the specific assertion that the copy of
the show cause notice was not communicated to the
petitioner, the respondent authorities to furnish copy of
the show cause notice to the petitioner and the petitioner
would be at liberty to make out reply to the said show
cause notice.
- 7 -
NC: 2026:KHC:16608
WP No. 6895 of 2026
HC-KAR
8. Petitioner to appear before the respondent -
Authority without further notice on 21.04.2026.
9. Accordingly, the petition is disposed of . All
contentions are kept open.
SD/-
(S SUNIL DUTT YADAV)
JUDGE
VP
List No.: 1 Sl No.: 17