2024 (2) TMI 1070 - HC - GST

Notice Placement Flaw Invalidates Tax Proceeding, Restores Taxpayer's Right to Fair Hearing Under CGST Section 73

HC set aside an order under Section 73 of CGST Act due to improper notice placement on the web portal. The court found the notice's location under ... Service by electronic upload on GST portal - Validity of notice hosted under 'Additional Notices and Orders' - Compliance with intimation requirements under Section 169 of the Central Goods and Services Tax Act, 2017 - Opportunity to file response and personal hearing before adjudication - Setting aside order and remand for fresh adjudicationService by electronic upload on GST portal - Validity of notice hosted under 'Additional Notices and Orders' - Compliance with intimation requirements under Section 169 of the Central Goods and Services Tax Act, 2017 - Whether uploading the Show Cause Notice in the GST portal under the category 'Additional Notices and Orders' constituted effective notice to the petitioner - HELD THAT: - The Court found that the petitioner did not receive or notice the Show Cause Notice because it was hosted under the portal category 'Additional Notices and Orders' rather than the ordinarily accessed 'View Notices and Orders' area. The Court relied on the observations in the Madras High Court judgments which identified the portal architecture and separate menu locations as causing genuine non-receipt. The respondent's submission that mere uploading on the portal satisfies intimation requirements under Section 169 was not accepted in the circumstances where the notice was placed in a less accessible category and thereby escaped the petitioner's attention. Having regard to these facts, the Court concluded that service in the manner adopted did not result in effective notice to the petitioner and that the petitioner had been deprived of the opportunity to respond prior to adjudication. [Paras 5, 6, 8]Uploading the Show Cause Notice under 'Additional Notices and Orders' did not constitute effective notice to the petitioner and the contention that portal uploading alone sufficed was rejected on these facts.Opportunity to file response and personal hearing before adjudication - Setting aside order and remand for fresh adjudication - Remedial steps to be taken in consequence of the defective service - HELD THAT: - The Court set aside the impugned order which recorded non-reply/non-appearance and directed that the portal be opened to enable the petitioner to file a response to the Show Cause Notice within 30 days. The Proper Officer was directed to re-adjudicate the Show Cause Notice within four weeks of filing and to afford the petitioner a personal hearing. The Court's order does not decide the merits of the Show Cause Notice; it mandates fresh consideration after providing the petitioner the opportunity to participate in the proceedings. [Paras 9, 10]Impugned order set aside; Show Cause Notice to be re-adjudicated after the petitioner files a response and is given a personal hearing.Final Conclusion: Impugned order dated 29.11.2023 is set aside. The respondent shall enable the petitioner to file a response to the Show Cause Notice dated 24.09.2023 within 30 days, after which the Proper Officer shall adjudicate the matter within four weeks and afford a personal hearing; the merits of the Show Cause Notice are left open for fresh adjudication. Issues involved: Impugned order u/s 73 of Central Goods and Services Tax Act, 2017; Non-receipt of Show Cause Notice; Compliance with Section 169 of the Act.Impugned Order u/s 73 of CGST Act, 2017:The petitioner challenged an order dated 29.11.2023 passed u/s 73 of the CGST Act, creating a demand against them. The petitioner contended non-receipt of the Show Cause Notice dated 24.09.2023, crucial for their response. The petitioner sought an opportunity to respond and a personal hearing, emphasizing the missed notice due to its placement under 'Additional Notices' instead of 'Notices' on the portal.Non-receipt of Show Cause Notice:The petitioner's counsel argued that as per Section 169 of the CGST Act, 2017, notice uploading on the portal constitutes sufficient intimation to the taxpayer. However, referencing a Madras High Court judgment, it was noted that notices should be under 'View Notices and Orders' rather than 'Additional Notices and Orders,' as highlighted in previous cases. The petitioner missed responding due to the notice's incorrect placement on the portal.Compliance with Section 169 of the Act:The court acknowledged the issue arising from the complex web portal design, leading to the petitioner's failure to notice the crucial notice. Citing another Madras High Court judgment, it was mentioned that the portal was redesigned to have both 'View Notices' and 'View Additional Notices' under one heading. As the petitioner missed the notice, the impugned order was set aside, granting them 30 days to respond and a subsequent adjudication within four weeks, along with a personal hearing opportunity.