Non-uploading of SCN and RUDs was an error, but physical service was valid under Rule 13(3)

The HC held that the initial non-uploading of the SCN and RUDs on the portal was an error by the Department, but the physical service of RUDs via speed post on 15th June, 2024, was valid and undisputed. The Petitioner failed to file a detailed reply and repeatedly sought adjournments. The Petitioner also did not appear at the hearing fixed on 24th August, 2024. Considering these facts, the HC found violations of natural justice and set aside the impugned order. The Petitioner was granted an opportunity for a hearing before the Adjudicating Authority. The petition was disposed of accordingly.

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ISSUES:

Whether the Form DRC-01 uploaded on the portal constitutes a valid Show Cause Notice (SCN) under the DGST Act.Whether the failure to upload the detailed summary and Relied Upon Documents (RUDs) along with the SCN on the portal affects the validity of the service of notice.Whether service of the RUDs through speed post beyond the limitation period is valid.Whether the impugned order passed without providing a proper hearing violates principles of natural justice.Whether reversal of Input Tax Credit prior to the impugned order impacts the demand raised.Whether the petitioner's repeated requests for adjournment and failure to file substantive replies affect the adjudication process.

RULINGS / HOLDINGS:

The Form DRC-01 alone is "not equivalent to a Show Cause Notice" as it lacks details of the demand and allegations; thus, uploading only Form DRC-01 without the SCN and RUDs is insufficient for valid service.The technical glitch causing non-upload of the detailed summary and RUDs on the portal was acknowledged, but the Department's subsequent service of the SCN and RUDs by speed post on 15th June, 2024, supported by proof of delivery, is valid and cannot be disputed.The petitioner's contention regarding limitation is left open to be raised before the Adjudicating Authority, without deciding on limitation at this stage.The impugned order dated 24th August, 2024 was passed without affording the petitioner a proper hearing, as the petitioner did not appear on the fixed hearing date and only uploaded replies seeking adjournments.Despite the petitioner's claim that Input Tax Credit was reversed and records were available with the Department, no substantive reply was filed contesting the demand before passing the order.Given the procedural irregularities and failure to provide an opportunity of hearing, the impugned order is set aside and the petitioner is entitled to a hearing before the Adjudicating Authority.

RATIONALE:

The Court applied the statutory framework under Section 73 of the DGST Act regarding issuance of Show Cause Notices and demand orders.It emphasized the requirement of proper service of SCN and RUDs to enable the recipient to file a meaningful reply, noting that mere uploading of Form DRC-01 without detailed documents is insufficient.The Court accepted the Department's explanation of a "technical glitch" affecting the portal upload but found the subsequent physical service by speed post, with proof of delivery, to satisfy service requirements.The principle of natural justice mandates that the petitioner be given an opportunity of hearing before passing a demand order; absence of such hearing renders the order liable to be set aside.The Court refrained from deciding on limitation issues, leaving them open for adjudication by the competent authority.No dissent or doctrinal shift was noted; the judgment follows established principles concerning service of notice and right to hearing under tax adjudication proceedings.

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