Introduction:

In Octantis Services Pvt. Ltd. vs. Union of India and Anr., the Bombay High Court comprising Justice B.P. Colabawalla and Justice Amit S. Jamsandekar granted significant ad-interim relief to the petitioner-assessee by staying the operation of a GST demand order issued pursuant to a Show Cause Notice (SCN) alleged to be time-barred under Sections 73(2) and 73(10) of the Central Goods and Services Tax (CGST) Act, 2017. The petitioner, Octantis Services Pvt. Ltd., challenged the validity of the SCN and consequent demand order on the grounds that the initial communication was improperly served on an outdated email ID, despite the GST authorities having full knowledge of the updated email address available on the GST portal. Represented by Senior Advocate Mr. Darius Shroff, along with a team from Shardul Amarchand Mangaldas & Co., the petitioner argued that such procedural irregularities, combined with limitation breaches and non-compliance with mandatory statutory requirements, rendered the entire proceedings legally unsustainable. The respondents, represented by counsel for the Union of India, defended the issuance and service of the SCN. However, after examining the factual matrix, including the correspondence trail and statutory provisions, the Court concluded that the petitioner had established a strong prima facie case and therefore granted a stay on the impugned demand order.

Arguments of the Petitioner:

The petitioner advanced a detailed argument asserting that the SCN was fundamentally vitiated due to non-compliance with mandatory statutory timelines prescribed under Sections 73(2) and 73(10) of the CGST Act. It was argued that the SCN was served beyond limitation because the GST Department initially sent it to an outdated email ID, even though the petitioner had validly updated the authorised signatory and email details on the GST portal much before the issuance of the SCN. The petitioner explained that all departmental communications—including GST audit communication and the pre-SCN consultation notice—had been consistently sent to the updated email address. This clearly demonstrated that the department had full knowledge of the correct and active email ID. The sudden switch back to an obsolete email address, previously used only at the time of initial registration, was argued to be not only irregular but also a violation of statutory service requirements. For an SCN to be valid under the CGST Act, it must be properly served within the statutory timeline so that the assessee has a fair opportunity to respond. The failure to do so, the petitioner contended, rendered the proceedings void ab initio. Further, the petitioner relied heavily on the precedent of Vodafone Idea Limited v. Union of India (2022 SCC Online Bom 1485), arguing that the impugned order was issued without due regard to territorial jurisdiction principles clarified in that landmark judgment. This, according to the petitioner, amounted to yet another jurisdictional error. The petitioner therefore prayed for the entire demand order to be quashed, or at the very least, for an immediate stay to prevent undue hardship.

Arguments of the Respondents:

The respondents, representing the Union of India and the GST authorities, contended that the SCN was validly issued and that any alleged irregularity in service did not nullify the proceedings. They argued that the statutory requirements regarding service were substantially complied with and that the petitioner had eventually received the SCN and had thus suffered no prejudice. Furthermore, the respondents asserted that even if the SCN for Financial Year 2020-21 was alleged to be time-barred, the proceedings for Financial Year 2021-22 remained unaffected and well within limitation, as both FYs formed the basis of the same demand order. The respondents defended the jurisdiction of the authorities and contested the applicability of the Vodafone Idea precedent, claiming that the factual circumstances differed significantly. They maintained that the SCN and consequent order were issued in accordance with the CGST Act and sought dismissal of the writ petition, arguing that granting a stay would impede legitimate revenue collection and set an undesirable precedent.

Court’s Judgment:

After examining the statutory provisions, the service records, and the parties’ submissions, the Bombay High Court found that the petitioner had established a strong prima facie case warranting the grant of ad-interim relief. The Court observed that the GST Department had been consistently corresponding with the petitioner on the updated and valid email ID, as reflected in the GST portal, during the audit process and pre-SCN consultation. Despite this, the impugned SCN was initially served on an old email address, clearly demonstrating a procedural lapse. The Court termed this lapse significant, emphasising that proper service of an SCN within statutory timelines is not a mere technicality but a mandatory requirement that affects the very foundation of tax adjudication. The Court also clarified that while the argument of limitation under Section 73(10) would apply only to the FY 2020-21 component of the SCN, the broader question—whether the failure to follow mandatory service procedures tainted the proceedings for both FYs—warranted deeper consideration at the final hearing. Importantly, the Bench stressed that the petitioner’s reliance on the Vodafone Idea judgment could not be summarily brushed aside, and the applicability of that precedent to the instant case would require detailed analysis. Given these observations, the Court stayed the operation of the impugned GST demand order until further hearing and clarified that the SCN for FY 2020-21 appeared to be time-barred on the face of the record. This ad-interim relief was granted on the basis of procedural illegality, limitation issues, and the existence of a strong prima facie case in favour of the petitioner.