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The core legal questions considered by the Court in this matter are:
2. ISSUE-WISE DETAILED ANALYSIS
Validity and Effectiveness of Service by Uploading on GST Portal
The legal framework governing service of notices under the GST Act is primarily contained in Section 169(1), which prescribes modes of service including tendering the notice to the person, sending by registered post, or any other prescribed manner. The Court acknowledged that uploading notices on the GST common portal is recognized as a mode of service and can be sufficient in certain circumstances.
However, the Court emphasized that mere uploading on the portal, without ensuring that the taxpayer is aware of the notice, does not amount to effective service. The petitioner contended that they were unaware of the issuance of the show cause notice uploaded on the portal and had not received the original notice by any other mode such as registered post or personal delivery.
The Court held that while uploading on the portal is a valid mode of service, it cannot be the sole means relied upon when the taxpayer does not respond or acknowledge receipt. The assessing officer must apply their mind and explore alternative modes of service as prescribed under Section 169(1), such as sending notices by registered post with acknowledgment due (RPAD), to ensure effective communication.
Opportunity of Personal Hearing
The petitioner was issued a show cause notice and was granted an opportunity of personal hearing, but the petitioner neither filed a reply nor availed the hearing opportunity. Despite this, the petitioner argued that they were unaware of the proceedings due to lack of effective service.
The Court noted that the impugned assessment order was passed confirming the proposals contained in the show cause notice without affording a proper opportunity of personal hearing, as the petitioner was not effectively served. The Court underscored the principle that passing an ex parte order based on mere formal compliance without ensuring meaningful participation by the taxpayer defeats the object of the GST Act and leads to avoidable litigation.
Obligation of Assessing Officer to Explore Alternative Modes of Service
The Court elaborated on the duty of the assessing officer to not merely rely on uploading notices on the portal but to explore other modes of service when there is no response from the taxpayer. The Court held that the officer should apply their mind and consider sending notices by RPAD or other prescribed modes to achieve effective service and ensure that the taxpayer is aware of the proceedings.
This approach is necessary to avoid the passing of ex parte orders based on empty formalities, which do not serve the purpose of the law and result in multiplicity of litigation, wasting the time of tax authorities and judicial forums.
Setting Aside the Impugned Order and Remanding the Matter
Given the lack of effective service and meaningful opportunity of hearing, the Court found it just and proper to set aside the impugned assessment order dated 27.12.2023. The Court directed the petitioner to deposit 25% of the disputed tax, which the petitioner had voluntarily offered, within two weeks of receipt of the order.
Subsequently, the petitioner was directed to file a reply along with supporting documents within two weeks. The assessing authority was then mandated to consider the reply, issue a clear 14-day notice affording an opportunity of personal hearing, and decide the matter in accordance with law.
The Court's directions ensure compliance with principles of natural justice and statutory requirements for effective service and hearing, thereby safeguarding the taxpayer's rights and the integrity of the adjudication process.
3. SIGNIFICANT HOLDINGS
The Court held:
"No doubt sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only fulfilling the empty formalities."
"Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well."
Core principles established include:
Final determinations:
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