2025 (10) TMI 787 - HC - GST

Show-cause notice time-barred due to service to outdated email; order quashed for natural justice breach, stay considered

HC held that the SCN was effectively time-barred because the department knew the authorized email had changed from the earlier address to the new address ... Service of SCN on the authorized registered email address of the Petitioner beyond the time prescribed u/s 73 (2) read with Section 73 (10) of the Central Goods and Services Tax Act, 2017 - impugned order is passed without taking into consideration most of the submissions of the Petitioner - judgment of the Jurisdictional High Court, in the case of Vodafone Idea Limited v/s The Union of India & Ors [2022 (7) TMI 645 - BOMBAY HIGH COURT] not followed - violation of principles of natural justice - HELD THAT:- The GST Department was very well aware that the authorized email address was changed from [email protected] to [email protected] from February 2022 onwards. The Show Cause Notice has been served on the authorized email address, namely, [email protected] only on 18th February 2025. We may once again clarify that the Show Cause Notice was served on 27th November 2024, but not on the authorized email address but on [email protected]. This being the case, atleast prima facie, we find that the Show Cause Notice was time barred. The Petitioner has made out a strong prima facie case for stay of the operation of the impugned order - Stand over to 20th November 2025 for admission. ISSUES PRESENTED AND CONSIDERED 1. Whether service of a Show Cause Notice on an email address other than the authorized/registered email on the GST portal, and subsequent service on the authorized email beyond the time prescribed under Section 73(2) read with Section 73(10) of the CGST Act, renders the Show Cause Notice time-barred and precludes passing of an adjudicatory order. 2. Whether an adjudicatory order passed without consideration of the specific contention that the Show Cause Notice was time-barred (including failure to consider a binding Jurisdictional High Court decision relied upon by the taxpayer) is vitiated for want of application of mind. 3. Whether prima facie relief (stay of operation of the impugned order) is justified where (a) there is material showing change of authorized email on the GST portal and (b) the authority did not address the time-bar/contention or relevant precedent. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legal framework: Time-bar and service via registered email Legal framework: Sections 73(2) and 73(10) of the CGST Act govern issuance and service of Show Cause Notices and prescribe timelines for initiation of recovery/proceedings; service on the taxpayer at the registered/authorized email address on the GST portal is the accepted mode for electronic communication. Precedent treatment: The Petition relied on a Jurisdictional High Court decision (referred to before the authority) delineating how service and timelines under the CGST regime must be complied with; the impugned order does not record any engagement with that decision. Interpretation and reasoning: The Court examined documentary material on record (portal entries and prior departmental correspondence) showing that the authorized email on the GST portal had been amended to a particular email in February 2022 and that subsequent departmental communications (including audit intimation, audit observations and pre-SCN hearing notice) were sent to that authorized email. The SCN for the relevant financial year was issued on 30 October 2024 and, on the authority's case, served on 27 November 2024; however, the SCN was initially sent to a different email (the earlier/non-authorized address) and only sent to the authorized email on 18 February 2025-beyond the timeline prescribed under the CGST provisions for that financial year. Ratio vs. Obiter: Ratio - where statutory timelines and service via the registered/authorized email are mandatory under the CGST Act, belated electronic service on the authorized email can render the SCN time-barred for the period in question. Obiter - specific factual comparisons to other modes of service or hypothetical alternative notice mechanisms not raised in the record. Conclusions: Prima facie the Show Cause Notice insofar as it pertains to Financial Year 2020-21 is time-barred because it was not served on the authorized email within the period permitted under Sections 73(2) read with 73(10) CGST; the Court found sufficient material to treat the contention as strong on the facts presented. Issue 2 - Application of mind: Failure to consider time-bar argument and binding precedent Legal framework: Administrative/adjudicatory orders must record consideration of objections raised by the party and relevant jurisprudence cited before the authority; failure to do so may vitiate the order for want of application of mind. Precedent treatment: The petitioner specifically placed a Jurisdictional High Court ruling before the authority (on similar issues concerning service/timelines); the impugned order contains no discussion of that ruling and does not address the petitioner's time-bar contentions. Interpretation and reasoning: The Court noted that the petitioner had expressly raised the time-bar issue and cited the Jurisdictional decision prior to the authority, yet the impugned order neither engages with the factual matrix demonstrating change of authorized email nor addresses the precedent relied upon. This omission indicates that relevant submissions were not considered and the order does not reflect any reasoned rejection of those submissions. Ratio vs. Obiter: Ratio - an adjudicatory order that omits consideration of a pleaded time-bar defence and pertinent binding precedent undermines the decision's validity for want of application of mind. Obiter - commentary on the proper scope of departmental fact-finding where evidence is contested and requires full adjudication at the merits stage. Conclusions: The impugned order is prima facie vitiated by failure to consider the petitioner's central contention (time-bar) and the cited Jurisdictional authority; this deficiency strengthens the case for interim relief and necessitates fresh consideration at final hearing. Issue 3 - Appropriateness of ad-interim relief and scope (financial year distinction) Legal framework: Interim relief in writ proceedings is appropriate where the petitioner makes out a prima facie case, balance of convenience favours relief, and irreparable injury would follow; relief may be tailored to distinct periods/claims where merits differ. Precedent treatment: The Court applied established injunctive principles to administrative tax proceedings and treated the petitioner's documentary record and unaddressed submissions as establishing a strong prima facie case. Interpretation and reasoning: On the facts, the Court found (a) clear documentary evidence that the authorized email had been changed on the portal and used in departmental communications after the change, (b) a delay in service on the authorized email which, for FY 2020-21, resulted in belated service beyond the statutory timeline, and (c) non-consideration of the time-bar contention and precedent by the adjudicating authority. The Court limited its prima facie finding: the time-bar conclusion was confined to FY 2020-21 only; for FY 2021-22 the time-bar did not arise on the present record. However, the defect of non-consideration of submissions/precedent was held to impinge upon both financial years. Ratio vs. Obiter: Ratio - interim stay of the impugned order was warranted to preserve the petitioner's position pending full adjudication because of the time-bar for FY 2020-21 and failure to consider key submissions on both years. Obiter - the Court's observations do not preclude the Revenue from addressing the points fully at final hearing nor adjudicating the merits where time-bar is not established. Conclusions: The Court granted ad-interim stay of operation of the impugned order (limited to preserving status quo) until further orders, holding that prima facie grounds existed for relief-time-bar for FY 2020-21 and failure to consider contentions/precedent for both years. The matter was listed for admission with directions for filing of affidavits and observance of timelines; failure by the Revenue to file a reply within the specified time would lead the Court to proceed on the basis of the material on record.