2022 (3) TMI 86 - HC - GST

Improper Service of Show Cause Notices Through GST Portal Violates Natural Justice Under Section 169

The HC set aside GST assessment orders due to improper service of Show Cause Notices through the web portal, finding violations of natural justice ... Service under Section 169: methods of service and sufficiency - Deemed service and electronic portal communication - Interim practice of simultaneous physical service pending technical issues - Quashing and remand for speaking order - Treatment of impugned orders as supplementary Show Cause Notices and right to replyService under Section 169: methods of service and sufficiency - Deemed service and electronic portal communication - Interim practice of simultaneous physical service pending technical issues - Whether service by uploading notices on the State web portal alone constitutes sufficient compliance with Section 169 of the GST Acts in the absence of confirmation that portal uploads are auto populated to the GST common portal and accessible to the assessee. - HELD THAT: - The Court observed that Section 169 permits several modes of service, including making communications available on a common portal, but held that mere uploading on the State web portal does not automatically satisfy the statutory requirement unless it is established that such uploads are auto populated and reliably reflected on the GST common portal/dashboard accessible to the assessee. The Court noted recurring technical glitches and intercommunication problems between State and Central GST portals which may prevent actual notice availability to the taxpayer. In view of these practical difficulties, the Court directed that until the technical problems are resolved the authorities should effect service by registered post/speed post/courier with acknowledgment in addition to uploading on the portal, and that once technical issues are fixed physical service may be dispensed with. [Paras 11, 12, 13, 14]Uploading notices on the State web portal alone is not a sufficient compliance in the absence of confirmed auto population to the common GST portal; authorities must simultaneously serve notices by registered post/speed post/courier with acknowledgment until technical issues are resolved.Quashing and remand for speaking order - Treatment of impugned orders as supplementary Show Cause Notices and right to reply - Opportunity to reply and timeline for re assessment - Whether the impugned assessment orders should be set aside for violation of principles of natural justice and remitted for fresh consideration after giving the petitioners an opportunity to reply. - HELD THAT: - Finding that the impugned assessment orders were passed without adequate assurance of proper service and thereby in breach of the principles of natural justice, the Court quashed the impugned assessment orders and remitted the matters to the respondents to pass speaking orders on merits and in accordance with law. The Court directed that the impugned orders quashed by this order shall be treated as supplementary Show Cause Notices and that the petitioners file replies to the respective Show Cause Notices. Given the temporal locus of the dispute, the Court mandated that appropriate orders be passed within 45 days from receipt of the order copy. [Paras 15, 16, 17]Impugned assessment orders quashed and remitted for fresh adjudication after service and opportunity to reply; quashed orders treated as supplementary Show Cause Notices and respondents to pass appropriate orders within 45 days.Final Conclusion: Writ petitions disposed by setting aside the impugned assessment orders for defective service and remitting the matters for fresh, speaking adjudication after proper service (physical service to continue alongside portal uploads until technical issues are resolved); petitioners permitted to file replies and respondents directed to decide within 45 days. Issues:Challenging assessment orders and recovery proceedings based on lack of proper service of Show Cause Notices and violation of principles of natural justice.Analysis:The petitioners challenged assessment orders and recovery proceedings due to alleged lack of proper service of Show Cause Notices or adequate opportunity to respond. The counsel for the petitioners argued that the impugned orders were passed in violation of principles of natural justice. On the contrary, the Government Advocate for the respondents contended that the notices were uploaded on the State Government's web portal and auto-populated in the GST web portal maintained by the Central Government, making them accessible to the petitioners.The Government Advocate further argued that the impugned orders could be challenged before the appellate authority under Section 107 of the respective GST enactments. Reference was made to Section 169 of the GST Acts, highlighting the various methods of service of notices deemed sufficient. The counsel for the respondents cited a decision of the Kerala High Court in support of their arguments and sought dismissal of the Writ Petitions on these grounds.Upon hearing both parties and examining the records, the court noted that while Section 169 of the GST Acts provides for different methods of communication, proper confirmation of the service of notices and orders uploaded on the State Government's web portal is essential for compliance. The court acknowledged technical issues in the GST web portal and directed the respondents to continue serving notices through registered post or courier until technical problems are resolved.The court emphasized the need for proper service of notices and ordered the remittance of cases back to the respondents for fresh assessment orders. The petitioners were instructed to respond to the Show Cause Notices, which were to be treated as supplementary notices. The court set a deadline for the respondents to pass appropriate orders within forty-five days from the date of the order, considering the Assessment Year in question.In conclusion, the court set aside the impugned assessment orders, emphasizing the importance of proper service of notices and adherence to legal procedures. The judgment aimed to ensure compliance with principles of natural justice and directed the respondents to reevaluate the cases in accordance with the law.