2024 (11) TMI 461 - HC - GST

Judicial Review Upholds Procedural Fairness: GST Order Challenged, Notice Validated, Proceedings Remanded with Cost Directive

HC partially allowed petitioner's challenge to GST order under Section 73 of KGST Act. While upholding authorities' right to issue E-mail notice, court ... Challenge to order passed under Section 73 of the Karnataka Goods and Services Tax Act, 2017 - discrepancy in the returns - non-payment of GST - attachment of bank account of petitioner - unaware of issuance of the notice - violation of principles of natural justice - HELD THAT:- It is the responsibility of the petitioner to keep a valid E-mail ID for communication purposes. If she changes the E-mail ID, she is required to update the same in the GST portal. Admittedly, the petitioner had not done it at the time of issuance of the said notice. No fault can be found with the authorities concerned in passing the impugned order pursuant to the issuance of the recovery notice. However, taking into consideration that the petitioner did not have an opportunity of participating in the proceedings, this Court is of the opinion that interest of justice would be met, if an opportunity is given to the petitioner to participate in the proceedings by setting aside the impugned order at Annexure-D and summary of the order at Annexure-E and consequently, the recovery notice at Annexure-F to the writ petition subject to imposing cost on the petitioner and remanding the matter back to respondent no.1. Petition allowed by way of remand. Issues:- Challenge to order under Section 73 of KGST Act- Nonpayment of GST alleged- Lack of response to notice- Validity of notice via E-mail- Opportunity to participate in proceedings- Setting aside impugned order- Imposition of cost- Remand of matter to respondent no.1Analysis:The petitioner, a private limited company, challenged an order passed under Section 73 of the Karnataka Goods and Services Tax Act, 2017 (KGST Act) alleging nonpayment of GST. The petitioner received a notice via E-mail regarding discrepancies in returns and nonpayment of GST. The petitioner contended that she did not utilize the provided E-mail ID and was unaware of the notice. The High Court noted that it is the petitioner's responsibility to maintain a valid E-mail ID for communication and update it on the GST portal. As the petitioner failed to do so, the authorities were justified in passing the impugned order and issuing a recovery notice.However, considering that the petitioner was not given an opportunity to participate in the proceedings, the Court decided to set aside the impugned order, summary of the order, and the recovery notice. The Court directed the petitioner to pay a cost of Rs. 10,000 to the Registrar General of the High Court within three weeks. The matter was remanded back to respondent no.1 for further proceedings, with the petitioner required to appear before respondent no.1 without further notice. Respondent no.1 was instructed to dispose of the matter expeditiously after hearing the petitioner.In conclusion, the writ petition was disposed of, and any pending Interlocutory Applications were deemed irrelevant for consideration.