Bombay High Court Stays GST Order Against Octantis Services Pvt. Ltd.

Court Finds Show Cause Notice Time-Barred and Procedurally Flawed

In a significant judgment, the Bombay High Court has granted ad-interim relief to Octantis Services Pvt. Ltd., staying the operation of an impugned GST order dated February 27, 2025. The court found that the Show Cause Notice, pivotal to the order, was served on an unauthorized email address and beyond the prescribed time limit, thereby rendering it time-barred.

The case, Octantis Services Pvt. Ltd. v. Union of India, underscores crucial procedural lapses by the GST authorities. The petitioner, represented by Senior Advocate Mr. Darius Shroff, argued that the Show Cause Notice related to the financial year 2020-2021 should have been served by November 27, 2024, on the authorized email address registered on the GST portal. However, the notice was erroneously sent to a different email address and was only forwarded to the correct address months later, on February 18, 2025.

The bench comprising Justices B.P. Colabawalla and Amit S. Jamsandekar took note of the petitioner’s submission that the correct email address had been updated on the GST portal as early as February 15, 2022, and all subsequent communications were conducted through this address. The court observed, "The GST Department was very well aware that the authorized email address was changed from octantisgst@gmail.com to Osplindiaitx@fb.com from February 2022 onwards."

In addition to procedural errors, the court criticized the adjudicating authority for not considering the petitioner’s arguments and failing to apply the jurisdictional precedent set by the High Court in the Vodafone Idea Limited v. Union of India case. This oversight was deemed a procedural lapse, further strengthening the petitioner’s case.

Consequently, the court found a strong prima facie case in favor of the petitioner and issued an interim stay on the order, preventing any action based on the flawed Show Cause Notice. The court clarified that the time-bar issue pertains only to the financial year 2020-2021, while the procedural lapses apply to both financial years covered by the notice.

The respondents, represented by Mr. Ram Ochani, were granted four weeks to file an affidavit in reply, with the matter scheduled for admission on November 20, 2025. The court’s direction emphasized adherence to deadlines, warning that failure to respond would result in proceeding without the respondents' input.

This judgment highlights the importance of procedural compliance in tax matters and signals a reinforcement of taxpayer rights against administrative oversights. 

Bottom Line:

GST Law - Show Cause Notice under Section 73 of CGST Act, 2017 served on an unauthorized email address beyond the prescribed time limit is time-barred. Arguments raised by Petitioner and applicable precedents must be considered by adjudicating authority.

Statutory provision(s): Central Goods and Services Tax Act, 2017 Section 73 (2), Central Goods and Services Tax Act, 2017 Section 73 (10)

Octantis Services Pvt. Ltd. v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 2811298