GST Assessment Orders Invalidated Due to Procedural Defects in Electronic Notice Serving Under Section 74(5)

HC allowed writ petitions challenging GST assessment orders under Section 74(5). The court found non-compliance with Rule 142(1) mandatory notice requirements, specifically highlighting absence of electronic notice upload. Orders dated 12.03.2021 and 10.03.2021 were set aside, with directions to Assessing Officer to follow prescribed procedural guidelines and provide proper show cause notice before final assessment.

---

---

Issues involved:
Quashing of order under Section 74(5) of the Central GST Act/Punjab GST Act, 2017 without following Rule 142(1) - Mandatory show cause notice requirement.

Detailed Analysis:

The High Court considered two writ petitions with identical issues seeking the quashing of orders passed under Section 74(5) of the Central GST Act/Punjab GST Act, 2017. The main question was whether a show cause notice as per Rule 142(1) of the CGST Act was mandatory before passing such an order. The petitioner argued that proper procedure was not followed, emphasizing the necessity of Rule 142(1) compliance before final assessment orders were issued.

The respondents contended that notices were served to the petitioner before initiating assessment proceedings under Section 74(5) of the Acts. They highlighted the various attempts made to involve the petitioner in the process, including issuing summon notices and providing opportunities for compliance. The State Tax Officer affirmed that due process was followed, but the petitioner's non-compliance led to the final order being passed based on available records and revenue interests.

In support of the petitioner's case, reference was made to a judgment by the High Court of Madhya Pradesh where non-compliance with Rule 142(1) led to a demand being struck down. The judgment emphasized the electronic communication of notices as prescribed by the rule, which was crucial for due process. The High Court found that in the present case, there was no evidence that the notice was uploaded on the revenue website as required by Rule 142(1) before the final orders were issued.

Consequently, the High Court allowed the writ petitions, setting aside the orders dated 12.03.2021 and 10.03.2021, and remanding the matter back to the Assessing Officer. The court directed the officer to follow the procedures outlined in Rule 142(1) of the CGST Act, ensuring that proper notice is issued and the petitioner is given a fair hearing in accordance with the law.

---