2025 (5) TMI 733 - HC - GST

Legal Notice Mishap: GST Portal Upload Error Invalidates Tax Order, Demands Proper Procedural Compliance and Fair Hearing

M/s Ram Chand And Sons Versus Additional Commissioner Grade-2 Appeals-1 State Tax And Another

The HC ruled that uploading a tax order under an incorrect tab on the GST portal does not constitute valid service. The court quashed the original tax ... Invalid service of SCN - uploaded under the tab 'Additional Notices & Orders' of the GST portal instead of the designated 'Notices & Orders' tab - Violation of principles of natural justice - HELD THAT:- It is not in dispute that the proceedings were initiated and the order dated 16.12.2023 was uploaded under the tab 'Additional Notices & Orders' of the GST portal, instead of 'Notices & Orders' tab. The issue in hand is no more res integra and the same has already been decided by the Division Bench of this Court in Ola Fleet Technologies Private Limited [2024 (7) TMI 1543 - ALLAHABAD HIGH COURT] and Tasneef Ahmad Mirza [2024 (10) TMI 1448 - ALLAHABAD HIGH COURT]. The impugned order dated 18.11.2024 passed by the Additional Commissioner, Grade - 2 (Appeal) - 3, Saharanpur as well as the impugned order dated 16.12.2023 passed by the Deputy Commissioner, State Tax, Saharanpur are hereby quashed - matter is remanded to the authority concerned to adjudicate the matter afresh - Petition allowed by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether an order under the CGST Act uploaded on the GST portal under the 'Additional Notices & Orders' tab (instead of the 'Notices & Orders' tab) constitutes valid service such that the period of limitation for filing an appeal begins to run from the date of upload. 2. Whether the appellate authority under Section 107 of the CGST Act had power to condone delay in filing the appeal where the appellate order was rejected on the ground of delay arising from alleged service by upload on the GST portal. 3. Whether the impugned assessment order and the order dismissing the appeal on the ground of delay should be quashed and the matter remanded for fresh adjudication when service by portal upload was effected under an incorrect tab and the petitioner was not aware of the orders. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of service by uploading order under 'Additional Notices & Orders' tab and commencement of limitation Legal framework: The statutory scheme regulating assessment, show-cause notices and appeals under the CGST Act is engaged; issues of service and commencement of limitation arise in relation to notices and orders purportedly communicated via the GST electronic portal. Relevant statutory provisions raised in the record include notices under Section 61 and show cause under Section 73, with appeals contemplated under Section 107. Precedent Treatment: The Court treated prior decisions of the Division Bench of the High Court as determinative on the question whether uploading an order under an incorrect tab on the GST portal constitutes effective service and triggers limitation. Those authorities were followed. Interpretation and reasoning: The Court accepted that upload of the order under the 'Additional Notices & Orders' tab - rather than the prescribed 'Notices & Orders' tab - did not amount to effective service on the taxpayer so as to attract the presumption of deemed service. The factual finding that the petitioner was unaware of the order because it was uploaded under the incorrect tab was material. Where statutory or mandated modes of electronic communication are not complied with in substance (i.e., the order is not placed where an affected person would reasonably be required to look), the presumption of service from mere upload does not apply and the period of limitation will not begin to run from the date of such upload. Ratio vs. Obiter: Ratio - Upload under an incorrect portal tab does not attract the presumption of deemed service and does not start limitation; this legal principle was applied to quash the impugned orders. Observational comments affirming prior bench decisions are supportive but secondary. Conclusions: The Court concluded that the impugned assessment order uploaded under the wrong tab could not be treated as served on the petitioner and therefore could not start the period of limitation for preferring an appeal. Issue 2 - Power of appellate authority under Section 107 to condone delay Legal framework: Section 107 of the CGST Act prescribes the appellate remedy and conditions for filing appeals to the appellate authority; the power to condone delay in filing appeals arises only as permitted by the Act and rules framed thereunder. Precedent Treatment: The Court relied on the High Court's earlier decisions which addressed whether an appellate authority may condone delay where the delay was attributable to non-notification/defective electronic service. Those decisions were followed. Interpretation and reasoning: The appellate authority in the impugned order declined to condone delay on the basis that it had no power to condone delay under Section 107. However, given the Court's determination that the uploader did not effect valid service, the foundational premise for the dismissal on delay was unsustainable. The appellate authority's asserted want of power to condone delay was considered both in light of the statutory scheme and the factual context of defective service; where service has not been established, the consequence of running of the limitation and rejection for delayed filing cannot be sustained. Ratio vs. Obiter: Ratio - An appeal dismissed solely on the ground of delay premised on defective portal service (upload under wrong tab) cannot stand; appellate authority's dismissal for delay was quashed for reconsideration on merits after proper service. Remarks about the appellate authority's general powers are supportive but not elaborated as core holding. Conclusions: The impugned appellate dismissal on the ground of delay, predicated on presumed service by portal upload under an incorrect tab, was unsustainable and set aside. Issue 3 - Quashing of impugned orders and directions for fresh adjudication when electronic service is defective Legal framework: Principles of natural justice and fair adjudication require that a taxpayer receive proper notice and an opportunity to be heard; where electronic notification mechanisms are used by revenue authorities, they must be applied in a manner that brings the communication to the recipient's attention as contemplated by the statutory/administrative scheme. Precedent Treatment: The Court expressly followed the line of authority from the Division Bench and other decisions of this Court holding that defective uploading to an incorrect portal location vitiates the presumption of service and justifies setting aside consequential orders. Interpretation and reasoning: Applying those principles, the Court found that the assessment order and the appellate order were both impacted by the defective method of upload and the petitioner's lack of knowledge. In consequence, both orders were quashed to secure a fresh adjudication consonant with principles of fair notice and opportunity. The Court provided specific remedial directions to govern the remand: treat the impugned order as a final notice for the purpose of permitting a written reply within two weeks, service of a fresh notice in the prescribed manner with at least fifteen days clear notice, petitioner's undertaking to appear, and requirement that a reasoned and speaking order be passed within one month of service. Ratio vs. Obiter: Ratio - Defective electronic service (upload under wrong tab) that prevents a taxpayer from knowing of an order undermines validity of both assessment and appellate orders and justifies quashing and remand with directions for fresh notice and adjudication. The procedural directions issued are operative and binding in the case at hand. Conclusions: The Court quashed both the assessment order and the appellate order, remanded the matter for fresh adjudication, and directed specific steps to ensure proper notice, opportunity to be heard, and expeditious reasoned disposal on merits.