2025 (7) TMI 1901 - HC - GST

Appeal allowed: notice only via common portal invalid when assessee couldn't access portal after GST registration cancelled

Tvl. Dimora, Rep. by its Managing Partner, Mr. A. Muruganantham Versus The Assistant Commissioner (State Tax), Woraiyur Assessment Circle, The Deputy State Tax Officer-II, Office of the Commercial Tax Department, Woraiyur Assessment Circle, The Deputy Commercial Tax Officer, Commercial Tax Department, Woraiyur Assessment Circle, Tiruchirappalli 620 018., The Branch Manager, ICICI Bank Limited, Thuraiyur, The Branch Manager, ICICI Bank Limited, Chennai, The Branch Manager, ICICI Bank Limited, Bangalore, The Branch Manager, State Bank of India, Trichy.

HC allowed the appeal, holding that service of notice solely via the common portal - with no RPAD or personal service - was ineffective where the assessee ... Service of notice - mode of service - assessee cannot access the portal due to cancellation of GST registration - principles of natural justice - HELD THAT:- In this case, admittedly, notice was only made available on the common portal. Notice was not sent through RPAD nor was it served in person. As rightly pointed out by the learned counsel for the appellant, in view of cancellation of GST registration, they could not access the portal. When the assessee could not even access the portal, it is required to conclude that there was no notice of service on the assessee. In this view of the matter, we hold that the orders impugned in the writ petitions were vitiated on account of breach of principles of natural justice. They stand quashed. The matter is remitted to the file of the assessing officer to pass orders afresh in accordance with law. Appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether service of notices/orders solely by making them available on the common portal satisfies the service requirements under Section 169 of the Central Goods and Services Tax Act, 2017 where the assessee cannot access the portal due to cancellation of GST registration. 2. Whether failure to effect service in a manner contemplated by Section 169, when the assessee could not access the common portal, vitiates the assessment orders for breach of principles of natural justice and requires quashing and remand. 3. Whether it is permissible to condition a remand or quashing of assessment orders upon deposit of a proportion (25%) of the disputed tax where service/participation defects are shown. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legal framework for service under Section 169 Legal framework: Section 169 prescribes multiple alternative modes of service - personal delivery, registered/speed post/courier with acknowledgment, email (as provided at registration or amended), making available on the common portal, publication, or, as last resort, affixation at the last known place of business/residence or on the notice board of the officer. Sub-sections further deem service to have occurred on the date of tender/publication/affixation and provide a presumption for postal transit periods. Precedent treatment: The text records that precedents are at variance - some orders have required a 25% pre-deposit when remanding matters, while other remands proceeded without such stipulation. No single binding rule from higher precedent is applied in the decision. Interpretation and reasoning: The Court applies the statutory list in Section 169 as exclusive modes by which service can be effected. The Court reasons that making a notice available on the common portal is one valid mode only if the assessee is capable of accessing the portal; where the assessee's GST registration has been cancelled and the assessee cannot access the portal, mere upload/availability does not equate to effective service under Section 169. Ratio vs. Obiter: Ratio - a notice made available on the common portal does not constitute valid service under Section 169 where the assessee, due to cancellation of registration, could not access the portal. Conclusion: Service solely by making communication available on the common portal is insufficient where the assessee cannot access the portal; in such circumstances, other modes contemplated by Section 169 must be employed to effect valid service. Issue 2 - Consequence of defective service: breach of natural justice, quashing and remand Legal framework: Principles of natural justice require that before an adverse order is passed, an assessee must be given reasonable notice and an opportunity to be heard. Section 169 prescribes modes of service essential to effectuate that opportunity. An order passed without valid service thus implicates audi alteram partem and is liable to be set aside. Precedent treatment: The Court notes divergence in practice - some single judges have quashed with conditional remands, others have remanded without conditions. The present decision does not purport to overrule any precedent but resolves the present dispute on its facts in accordance with statutory mandates and natural justice. Interpretation and reasoning: Given the admitted fact that notice was only uploaded to the common portal and not sent by RPAD or served personally, and given that the appellant could not access the portal due to cancellation of registration, the Court finds no effective notice was served. The lack of service deprived the assessee of opportunity to participate in proceedings, constituting breach of natural justice. Consequently, the impugned orders are vitiated. Ratio vs. Obiter: Ratio - where service is invalid under Section 169 and the assessee could not access the only mode used (common portal), the resulting assessment/order is vitiated for breach of natural justice and must be quashed and remitted for fresh adjudication. Conclusion: The impugned assessment orders stand quashed; the matter is remitted to the assessing officer to pass fresh orders after effecting valid service and affording opportunity to be heard, in accordance with law. Issue 3 - Permissibility of imposing a pre-deposit (25%) as condition for quashing/remand where service/participation defects exist Legal framework: The decision recognizes judicial practice under which some courts have conditioned relief on a pre-deposit of a portion of the disputed tax, but notes the absence of uniformity and the need to examine the merits where service was defective. Precedent treatment: The Court acknowledges conflicting precedents - single judges have both required and declined to require a 25% pre-deposit when remanding matters. The present Court does not follow the precedents requiring pre-deposit in circumstances where no valid service occurred. Interpretation and reasoning: The Court reasons that when the foundational procedural safeguard of valid service is absent and the assessee could not participate, it would be inappropriate to insist upon a monetary pre-condition (25% deposit) to secure the right to be heard. The Court distinguishes those prior decisions which required pre-deposit on facts where participation or service defects were not similarly established. Ratio vs. Obiter: Ratio - where an assessment order is vitiated due to invalid service and the assessee could not access the portal, quashing and remand should not be made conditional upon deposit of 25% of the disputed tax; the matter should be reopened and decided afresh with proper service. Conclusion: Imposing a requirement to deposit 25% of the disputed tax as a precondition for quashing/remand is not appropriate where the assessee did not receive valid service and therefore was denied the opportunity to participate; relief should be granted by quashing and remitting for fresh adjudication without such pre-deposit condition. Cross-references and ancillary points Where availability on the common portal is used as the sole mode of service, authorities must ensure the assessee has actual access (e.g., registration active and functioning); absent access, alternative modes under Section 169 must be employed so as to effectuate service and uphold audi alteram partem. The Court resolves the appeals on statutory interpretation and natural justice grounds and orders fresh adjudication; divergent judicial practices requiring pre-deposit are distinguished on the present facts rather than overruled as a general proposition.