Chikkanayakanahalli Narayanappa Srinivas Murthy… — Writ and Judicial Review | Karnataka HC (2026)

Chikkanayakanahalli Narayanappa Srinivas Murthy… — Writ and Judicial Review | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Order in Original at Annexure-A set aside; matter remitted to the stage of reply to show-cause notice; petitioner to appear before respondent No.1 on 08.04.2026 and may file an additional reply; authority to adjudicate afresh in light of the para-10 observations of W.P.No.11154/2023; all contentions kept open.

Issue for consideration

Whether the Order in Original is unsustainable because the services rendered by the petitioner to the Government authority were exempt in terms of notification No.25/2012 and the demand rested on inputs from Income Tax/TDS declarations (Form-26AS). +1 more

Court's answer

The Court found, on perusal of para-3 of the Order in Original, that the adjudicating authority had relied on inputs obtained from statements in Form-26AS relating to TDS.

Ratio / Principle

Taking note of the points in W.P.No.11154/2023 and the petitioner's contention that all aspects including limitation were not considered, the Order in Original at Annexure-A is set aside and the matter is remitted back to the stage of reply to show-cause notice; the petitioner is to appear before respondent No.1 on 08.04.2026.

Key takeaways

The petitioner is entitled to file an additional reply to the show-cause notice; the authority is to adjudicate afresh taking note of the para-10 observations of W.P.No.11154/2023 insofar as they apply to the petitioner, with all contentions kept open.ratio¶56

Detailed headnote1 paragraphs

Service tax - Demand founded solely on Form-26AS/TDS inputs - Order in Original No.90/2025-26 (Service Tax) dated 16.09.2025 passed by the Additional Commissioner of Central Tax, Bangalore West Commissionerate set aside by the High Court of Karnataka (S Sunil Dutt Yadav J) and matter remitted to the stage of reply to show-cause notice. Following the approach in W.P.No.11154/2023 (order dated 03.07.2024), where this Court had relegated matters in which service tax demands were raised solely on Income Tax declaration inputs, the petitioner was directed to appear before respondent No.1 on 08.04.2026 and was permitted to file an additional reply. Adjudicating authority to keep in mind the para-10 checklist: applicability of Section 65B(44) Finance Act, 1994, negative list, exemption under Notification No.25/2012-ST dated 28.06.2012, liability under Rule 2(1)(d) with applicable notification, and limitation per the law laid down by the Apex Court. All contentions kept open; petition disposed of.

NC: 2026:KHC:13185 WP No. 32985 of 2025

1 -

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 4^TH DAY OF MARCH, 2026

BEFORE

THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV

WRIT PETITION NO. 32985 OF 2025 (T-RES)

BETWEEN:

CHIKKANAYAKANAHALLI NARAYANAPPA SRINIVAS MURTHY SON OF SHRI C.D.NARAYANAPPA AGED 63 YEARS, HAVING ITS OFFICE AT: NO.12, 'SRI MATHA' 3^RD CROSS, 4^TH BLOCK, BASAVESHWARANAGAR, BENGALURU - 560 079.

…PETITIONER

(BY SRI. PRADYUMNA HEJIB.,ADVOCATE)

AND:

Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

THE ADDITIONAL COMMISSIONER OF CENTRAL TAX, BANGALORE WEST COMMISSIONERATE, 1^ST FLOOR, BMTC BUS STAND, BANASHANKARI, KANAKAPURA ROAD, BENGALURU - 560 070.

THE ASSISTANT COMMISSIONER OF CENTRAL TAX, WEST DIVISION-3, 1^ST FLOOR, BMTC BUS STAND, BANASHANKARI, KANAKAPURA ROAD, BENGALURU - 560 070.

…RESPONDENTS

(BY SRI. ARAVIND V. CHAVAN, ADVOCATE)

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HC-KAR

THIS WP IS UNDER FILED ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ORDER IN ORIGINAL BEARING NO.90/2025-26 SERVICE TAX (DIN 20250957YU000000D5B1) DATED 16.09.2025 (ANNEXURE-A) PASSED BY THE R-1.

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

The petitioner has called in question the validity of the Order in Original at Annexure-A. It is the case of the petitioner that the Order in Original has been passed without properly appreciating the contention that the services of the petitioner rendered to the Government authority were exempt in terms of the notification No.25/2012.

It is specifically asserted that in terms of notification No.25/2012, the service provided to the Government or local authority were exempt. Further contentions have been raised regarding authority not having taken note of the aspect of limitation and having gone beyond the show-cause notice.

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HC-KAR

It is further submitted that this Court in the

order passed in W.P.No.11154/2023 has remitted matters where it is found that demands for service tax have been raised solely on the inputs received from Income Tax declarations.

Perused the order at Annexure-A. Para-3 of the order would indicate that the authority has relied on the inputs obtained from statement in Form-26AS relating to TDS.

Noticed the observations made in the order of W.P.No.11154/2023 dated 03.07.2024. 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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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:

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

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HC-KAR

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-inOriginal, 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-inoriginal in question would also receive the same 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."

Taking note of the points and also the

contention of the petitioner that all aspects including the contention of limitation have not been taken note of, it would be appropriate to set aside the Order in Original at Annexure-A and remit the matter back to the stage of reply to show-cause notice. Petitioner to appear before respondent No.1 on 08.04.2026.

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HC-KAR

Petitioner is entitled to file additional reply to the show-cause notice and the authority may take note of the observations made in para-10 of W.P.No.11154/2023 insofar it applies to the case of the petitioner and adjudicate the matter afresh. All contentions are kept open.

Accordingly, petition is disposed of .

Sd/(S SUNIL DUTT YADAV) JUDGE

MCR