2025 (10) TMI 789 - HC - GST

Common GST portal service failures noted; condonation limited by statute; appellate remit barred; order set aside on deposit condition

The HC found service of the SCN and impugned order on the common GST portal under 'Additional Notices and Orders' and noted widespread portal-related ... Violation of principles of natural justice - valid service of SCN or not - SCN and the impugned order were put up on the common portal under the Tab meant for 'Additional Notices and Orders' - appeal dismissed on the ground of delay - HELD THAT:- In the first place it has been recognized that a considerable influx of litigation of similar nature is arising every day. Clearly, the assessee’s are facing difficulties in working on the GST Portal especially with respect to communication of Show Cause Notices and Adjudication Orders. Every day a large number of similar writ petitions are arising wherein numerous assessee’s are raising the common complaint that such notice and orders were not in their knowledge as they were not displayed promptly on the dash board upon such notices being issued or orders being passed. Under the law as declared by the Supreme Court condonation of delay cannot be granted beyond the fixed time period provided by the statute. Third, even their appeals are filed within time, the appeal authorities do not have the power to remand or remit the matter to the Adjudicating Authority. They may only pass an order on merits - The fact that the appeal authority may have rejected the appeal as time barred may not amount to an order passed in the appeal. It may only remain order passed on the application seeking condonation of delay. Only if the delay had been condoned, a regular appeal may have arisen. The impugned order is set aside subject to the petitioner depositing Rs. 1,00,000/- lacs within a period of one month from today. Subject to such deposit being made, the impugned order shall stand set aside. The petitioner shall file his reply within two weeks - Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether service of show-cause notices and adjudication orders through the common GST portal (under Section 169(1)(d) of the UPGST Act, 2017) satisfies statutory service and audibility requirements when such notices/orders are not prominently displayed on the portal dashboard. 2. Whether failure of an assessee to notice a portal-uploaded show-cause notice and adjudication order, resulting in non-appearance and expiry of limitation for appeal, can justify judicial interference with the adjudication order by writ despite existence of statutory appellate remedy. 3. What legal consequences follow where an appeal against an adjudication order is dismissed as time-barred (or where condonation of delay was not granted), and whether the writ court may entertain challenge to the original adjudication order notwithstanding the appellant authority's dismissal of condonation application. 4. Extent of appellate authority's powers under the GST scheme (specifically whether it can remit/remand to the adjudicating authority or is confined to deciding merits), and consequences for post-service adjudication process when procedural infirmity in service is shown. 5. Appropriate relief and conditions where procedural defects in electronic service are established but merits of demand remain unadjudicated - including deposit conditions and directions for fresh adjudication. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of electronic service via the common portal (Section 169(1)(d)) Legal framework: Service of notices and orders under the UPGST Act may be effected through the common GST portal as provided by Section 169(1)(d). The GST regime contemplates electronic communication as a mode of service. Precedent treatment: The Court refers to established practice under the GST scheme permitting portal service; no specific conflicting precedent in the judgment is overruled. The Court also notes a body of recurring writs raising similar portal-service complaints. Interpretation and reasoning: The Court recognized that while statutory provision permits portal service, practical realities of portal design and user experience matter. Where notices and orders are uploaded but not displayed prominently on the home page/dashboard (e.g., placed under an 'Additional Notices and Orders' tab not directly visible), the electronic mode may fail to bring the document to the addressee's effective notice. The Court treated the question as one of adequacy of communication required for a fair opportunity to observe and respond, not an absolute prohibition of portal service. Ratio vs. obiter: Ratio - Portal service is valid only if it affords reasonable and effective notice to the taxpayer; where portal placement makes notice not reasonably visible, procedural infirmity can be established. Obiter - general observations about volume of litigation and practical difficulties faced by taxpayers. Conclusions: Service via the common portal is permissible but must be effectuated in a manner that reasonably notifies the assessee; mere uploading under less visible tabs without further facilitation may not suffice to constitute effective service. (Cross-ref Issues 2-5.) Issue 2 - Judicial interference where lack of effective notice leads to loss of appellate limitation Legal framework: The statute prescribes rigid limitation for filing appeals; condonation of delay is tightly circumscribed by law and subject to Supreme Court precedent limiting power to extend statutory time. Precedent treatment: The Court follows the Supreme Court principle that condonation of delay cannot be granted beyond fixed statutory periods; appeal authorities lack power to extend prescribed limitation beyond statutory confines. The Court also observes that appellate authorities cannot remand merely to cure procedural defects where their powers are defined by statute. Interpretation and reasoning: The Court balanced the statutory insistence on limitation against principles of natural justice. It recognized that a taxpayer deprived of actual knowledge due to inadequacies in the portal display may be denied opportunity to appeal through no fault of his own. Given the rigidity of limitation and the absence of effective remedy before the appellate authority when notice was not reasonably brought to the assessee's attention, the writ jurisdiction remains available to correct gross procedural unfairness. The Court emphasized the need to preserve taxpayer trust in the tax regime. Ratio vs. obiter: Ratio - Where electronic service is ineffective and results in denial of opportunity to appeal within the statutory period, the writ court may grant relief notwithstanding the rigid limitation, because the appellate remedy was practically inaccessible. Obiter - normative remarks about trust in the tax regime and the volume of similar petitions. Conclusions: Failure of effective portal service that prevents timely appeal can justify setting aside adjudication orders by writ, subject to appropriate conditions, as statutory appellate remedies may be practically unavailable when notice was not brought to the assessee's attention (cross-ref Issue 3 on consequences of time-barred appeals). Issue 3 - Effect of appeal being dismissed as time-barred and availability of challenge to original order Legal framework: Where an appeal is dismissed for delay, the appellate order may merely dispose of the condonation application and not the substantive appeal on merits unless delay is condoned. The aggrieved party may seek extraordinary relief by writ if procedural infirmity prevented the effective exercise of the statutory right. Precedent treatment: The Court adheres to the distinction between an order refusing condonation (procedural) and an adjudication order on merits; it treats the former as not precluding independent judicial review of the adjudication order where jurisdictional defect in service is shown. Interpretation and reasoning: The Court observed that dismissal of an appeal as time-barred does not amount to an adjudicatory determination on the merits of the tax demand; hence, the writ court can examine whether procedural defects in service deprived the assessee of the opportunity to file a timely appeal. The Court rejected the contention that the dismissal of the appeal extinguishes the ability to challenge the original order by writ. Ratio vs. obiter: Ratio - A procedural dismissal for delay does not foreclose writ jurisdiction to challenge the original adjudication order where service-related jurisdictional defects are alleged and established. Obiter - observations on the nature of orders passed by appeal authorities. Conclusions: The existence of a time-barred dismissal before the appellate authority does not render a writ petition against the original adjudication order non-maintainable if procedural infirmities in notice/service are established. Issue 4 - Powers of the appellate authority under the GST scheme (remand/remit limitations) Legal framework: Statutory scheme delimits appellate authority powers; appellate body may decide the appeal on merits but may not have unfettered power to remit/remand to the adjudicating authority beyond statutory provisions. Precedent treatment: The Court notes that appeal authorities 'do not have the power to remand or remit the matter' in the usual course and can only pass orders on merits, following the statutory design and prior judicial exposition referenced in the judgment. Interpretation and reasoning: Given the limited remedial capacity of appellate authorities to address procedural defects caused by ineffective portal service (particularly where limitation bars a merits hearing), reliance solely on appellate remedies may be illusory. This reality informs the Court's readiness to exercise writ jurisdiction to secure a fresh adjudicatory opportunity. Ratio vs. obiter: Ratio - Because appellate authorities may be unable to remit matters for fresh adjudication, administrative or procedural defects that prevent the filing of a timely appeal may necessitate judicial intervention. Obiter - practical commentary on appellate powers within GST regime. Conclusions: The appellate authority's limited power strengthens the case for judicial relief where procedural flaws in service deprived the assessee of effective access to the appellate process (cross-ref Issues 2-3). Issue 5 - Appropriate relief where electronic service was procedurally defective Legal framework: Writ jurisdiction permits grant of relief calibrating both protection of legal rights and prevention of vexatious delay; courts may condition relief (e.g., deposit) and direct fresh adjudication within time limits to balance competing interests. Precedent treatment: The Court applies equitable principles routinely employed in tax litigation - conditional setting aside of demands subject to deposit and directions for reconsideration - consistent with judicial practice where substantive adjudication is desirable but procedural regularity is to be ensured. Interpretation and reasoning: The Court found the petitioner's explanation of non-receipt and non-visibility of portal notices credible and of a class of genuine grievances. To balance revenue interest and protect procedural fairness, the Court set aside the impugned order subject to a substantial deposit (Rs. 1,00,000/-) within one month, allowed filing of reply within two weeks thereafter, and directed the adjudicating authority to hear and decide a speaking and reasoned order on or before a specified date. The Court clarified that deposited amounts remain subject to the final adjudication. Ratio vs. obiter: Ratio - Where procedural defect in electronic service is demonstrated, the Court may set aside the order conditionally and direct fresh adjudication after giving the assessee opportunity to be heard, subject to deposit to protect revenue. Obiter - specifics of deposit amount and timeline tailored to facts of the case. Conclusions: Conditional relief - impugned order set aside subject to deposit and directions for fresh hearing and reasoned decision within fixed timeframe; amounts deposited to be subject to final adjudication. The remedy balances taxpayer's right to a hearing and revenue protection (cross-ref Issues 1-4).