2025 (8) TMI 1290 - HC - GST

Service defect from misfiled notice lets taxpayers appeal order; attachment via Form GST DRC-13 quashed, Rs.75,354 deducted

Shashi Kant Jaiswal & Anr. Versus Assistant Commissioner of State Tax, Shyambazar- Manicktola-Beadon Street Charge & Ors.

Shashi Kant Jaiswal & Anr. Versus Assistant Commissioner of State Tax, Shyambazar- Manicktola-Beadon Street Charge & Ors. - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether service of show cause notices and orders effected by uploading on the electronic portal complies with Section 169 of the Act when the notice is uploaded under an atypical portal heading ('view additional notices and orders') rather than the usual heading ('view notices and orders'), and whether lack of actual notice invalidates consequential proceedings. 2. Whether an appeal from an order under Section 73 of the Act may be permitted and adjudicated without insistence on further pre-deposit where the appellant may not have had effective notice of the original proceeding. 3. Whether an attachment of bank accounts effected under Section 79(1)(c) of the Act (Form DRC 13) can be sustained where there is a plausible lack of effective service of the antecedent demand/order. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of service by electronic uploading on the portal (Section 169) Legal framework: Section 169 of the Act provides that uploading notices/orders on the electronic portal constitutes deemed service. The relevant practice on the portal ordinarily involves uploading under the 'view notices and orders' section. Precedent treatment: The Court's order contains no citation to or reliance on earlier authorities; no precedent was expressly followed, distinguished, or overruled in the reasoning. Interpretation and reasoning: The Court acknowledged the statutory deeming provision for portal service but emphasized that the mode and manner of upload must conform to general practice so as to give practical effect to the deeming provision. The Court found it 'unusual' for a show cause and consequent order to be uploaded only under the 'view additional notices and orders' tab, and accepted that such atypical placement could result in actual non-awareness by the affected party. The Court reasoned that where a party would not, in ordinary course, discover a notice because it is not placed in the customary portal location, the operation of the deeming provision may not, in effect, satisfy principles of fair notice and opportunity to be heard. Ratio vs. Obiter: Ratio - That compliance with the portal service provision in Section 169 must be effected in a manner consistent with ordinary portal practice so as to afford actual notice; atypical or unusual posting that plausibly results in non-awareness can vitiate the practical efficacy of service and be a relevant ground in adjudication of remedies. Obiter - Observations on what constitutes 'usual' versus 'additional' portal tabs are contextual to the facts and do not lay down a comprehensive test beyond the immediate finding of plausible non-notice. Conclusion: The Court accepted that, on the material, it could not rule out lack of effective notice because of atypical upload practice; this factual conclusion formed the basis for granting relief without finally deciding the legal effect of the deemed service provision in all circumstances. Issue 2 - Permission to prefer appeal without further pre-deposit where effective notice is disputed (Sections 73 and appellate regime) Legal framework: Orders under Section 73 determine tax/demand; appellate remedies ordinarily involve statutory pre-deposit requirements (not detailed in the judgment) before adjudication by appellate authority. Precedent treatment: No earlier authority was applied to override pre-deposit requirements; the Court exercised its supervisory equitable jurisdiction to moderate procedural requirements in the factual context. Interpretation and reasoning: Recognizing that an amount of Rs.75,354 had already been debited from the petitioners' electronic credit ledger and that petitioners may have lacked notice of the demand, the Court exercised discretion to enable substantive adjudication on the appeal. The Court directed that if an appeal is filed within four weeks, the appellate authority shall hear and dispose of it on merits without insisting on further pre-deposit and shall accept documents and defenses of the appellants. This approach balances the respondent's interest in enforcement (sum retained to the credit of proceedings) with the petitioners' right to be heard where effective notice is plausibly absent. Ratio vs. Obiter: Ratio - In circumstances where effective notice is plausibly absent and a pecuniary debit has occurred, a court may permit an appeal to be heard on merits without further pre-deposit and direct retention of the debited amount pending appeal. Obiter - Directions as to appellate procedure beyond the limited waiver of pre-deposit (e.g., what constitutes adequate documentary proof) are not laid down and remain within appellate authority's discretion. Conclusion: The Court ordered that an appeal filed within four weeks be entertained without further pre-deposit, with the appellate authority to decide on merits and accept the petitioners' documents; the debited sum is to be retained to the credit of the proceedings. Issue 3 - Validity of attachment of bank account under Section 79(1)(c) where antecedent demand may be invalid for lack of effective notice Legal framework: Section 79(1)(c) authorizes attachment/precautionary measures such as bank account attachment to secure recovery of tax demands adjudicated under the Act; such attachments follow issuance of notices in Form DRC 13. Precedent treatment: No precedential authorities were cited; the Court exercised fact-sensitive judicial review of the attachment's sustenance. Interpretation and reasoning: Given the Court's finding that effective notice of the show cause and consequent determination could plausibly be absent, the Court concluded that consequential attachment triggered by those proceedings could not be sustained in the facts. The attachment was quashed while preserving the revenue's substantive claim subject to appellate adjudication and the retained amount in the electronic credit ledger. Ratio vs. Obiter: Ratio - An attachment under Section 79(1)(c) may be quashed where it is founded on antecedent proceedings whose service is in bona fide dispute and where the affected party lacked opportunity to contest the demand. Obiter - The order does not establish a general prohibition on attachments pending any dispute about service; it is confined to the present factual matrix. Conclusion: The Court quashed the bank-account attachment effected by the Form DRC 13 notice dated 11th June, 2025 on the stated premise of plausible non-notice; however, the quashal is conditional upon the petitioners invoking the appellate remedy within the prescribed timeframe. Interrelationship and conditionality of reliefs Cross-reference: Issues 1-3 are interlinked: the factual finding of plausible lack of effective service (Issue 1) justified (a) permitting an appeal without further pre-deposit (Issue 2) and (b) quashing the consequent attachment (Issue 3); the Court conditioned the reliefs upon filing of appeal within four weeks. Final operative conclusions: The Court disposed of the petition by (i) permitting an appeal against the Section 73 order if filed within four weeks, to be heard without insisting on further pre-deposit and with acceptance of documents and defenses; (ii) directing that Rs.75,354 remain retained to the credit of the proceedings; (iii) quashing the bank-account attachment effected under Section 79(1)(c); and (iv) warning that failure to file the appeal within four weeks will forfeit the benefit conferred and permit respondents to enforce the original demand according to law.