2025 (2) TMI 1091 - HC - GST

GST determination order quashed due to improper service of show cause notice on portal under section 73

Kerala HC set aside GST determination order under section 73 after finding improper service of show cause notice. The notice was posted in 'Additional ... Challenge to SCN and the consequential order issued u/s 73 of the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017 - no proper service of SCN - petitioner was unaware of the proceedings until the intimation of the recovery proceeding was uploaded in the portal - HELD THAT:- In the instant case, concededly, the notice that preceded the order of determination under section 73 of the GST Act was posted in the portal of the petitioner in the tab meant for ‘Additional Notices and Orders’. There was yet another tab for ‘Notices and Orders’. Normally, every person will access the tab meant for ‘Notices and Orders’ to check whether any notices have been issued. In the absence of any notices uploaded in the tab for ‘Notices and Orders’, a person may not check the tab for ‘Additional Notices and Orders’, unless there are proper instructions on the same page itself, indicating expressly, the manner in which the portal should be navigated. Of course, while accessing the portal, every taxpayer is bound to peruse every window. However, for all practical purposes, a taxpayer will not read through every user information given in all the windows to comprehend the mode in which the pages should be navigated. In the absence of specific notes or instructions given on the same page meant for ‘Notices and Orders’ or ‘Additional Notices and Orders’ it cannot be assumed that there has been an effective dissemination of information to taxpayers that the first notice regarding determination under section 73 or 74 of the GST Act will be uploaded only in the tab meant for ‘Additional Notices and Orders’. In the instant case, Ext. P3 and Ext. P4 notices were issued on 03.07.2023 and 16.11.2023, both of which are before the decisions in M/s. Sabari Infra Private Limited [2023 (9) TMI 501 - MADRAS HIGH COURT] as well as that in Anhad Impex [2024 (2) TMI 1070 - DELHI HIGH COURT]. It is therefore evident that the web portal as it now stands is different from what existed earlier. The scheme of arrangement of the portal was confusing and vague earlier, to identify where the notices for determination would be posted. This Court is satisfied that the petitioner was unaware of the notice and was even not properly served with the notices due to the vagueness of the system. The lack of knowledge of the notice issued to the petitioner is therefore attributable to the respondents. Thus, there was neither any proper service of notice nor was sufficient opportunity granted to the petitioner to contest the matter. Therefore, it is essential that the order of determination dated 06.03.2024 be set aside and the petitioner be granted an opportunity to file response to Ext.P3 and Ext.P4 notices. Conclusion - The petitioner's lack of awareness of the notices was attributable to the respondents' failure to effectively serve the notices, leading to a violation of natural justice. Therefore, the Court set aside the order of determination and granted the petitioner an opportunity to respond to the notices within 30 days. Petition allowed. The Court considered the challenge to a show cause notice and consequential order issued under section 73 of the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017 ('the GST Act'), imposing tax, interest, and penalty on a partnership firm. The petitioner contended that it was unaware of the proceedings until the intimation of the recovery proceeding was uploaded in the portal, as the notices were not served on the petitioner and were uploaded in a tab for 'Additional Notices and Orders' instead of the usual 'Notices and Orders' tab. The respondents argued that the common portal clearly distinguished between administrative matters and matters of adjudication, and the design of serving notices related to adjudication assessment in the 'Additional Notices and Orders' tab was appropriate.The Court analyzed the distinction between 'non-service of notice' and 'not noticing or lack of knowledge of service of notice', noting that lack of knowledge attributable to the sender's default could violate natural justice principles. It observed that the petitioner's lack of knowledge of the notice was due to the vague arrangement of the portal, which did not clearly indicate where notices for determination would be posted. The Court referred to a decision of the Madras High Court in M/s. Sabari Infra Private Limited v. Asst. Commissioner, highlighting the complexity of the web portal design and lack of clear instructions regarding the posting of notices. It also mentioned a decision of the Delhi High Court in Anhad Impex and Others v. Assistant Commissioner, which emphasized the need for clear navigation instructions on the portal.Based on the above analysis, the Court concluded that the petitioner's lack of awareness of the notices was attributable to the respondents' failure to effectively serve the notices, leading to a violation of natural justice. Therefore, the Court set aside the order of determination and granted the petitioner an opportunity to respond to the notices within 30 days. If a response is filed within the specified time, the second respondent was directed to reconsider the matter after granting a hearing to the petitioner; otherwise, the respondent could proceed in accordance with the law.In summary, the Court found that the petitioner's lack of knowledge of the notices was due to the vague arrangement of the portal, leading to a violation of natural justice. As a result, the order of determination was set aside, and the petitioner was granted an opportunity to respond to the notices within a specified timeframe.