GST show-cause notice served only via portal and no hearing; assessment set aside, remanded after 25% disputed tax deposit.

An ex parte GST assessment was challenged for breach of natural justice as the show cause notice was only uploaded on the portal and no personal hearing was afforded. The HC held that while portal upload is a statutorily valid mode of service, where repeated portal notices elicit no response the proper officer must apply mind and attempt alternate modes under s.169(1) (preferably RPAD) to ensure effective service; otherwise confirmation of proposals without hearing amounts to empty formality and violates natural justice. The assessment order was set aside and remanded for fresh consideration, conditional on the taxpayer depositing 25% of the disputed tax within four weeks, with quashing effective upon such payment.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the impugned assessment order was liable to be set aside for violation of principles of natural justice on the ground that it was passed without affording an opportunity of personal hearing, in circumstances where notices were uploaded on the GST common portal and the taxpayer did not respond.

(ii) Whether, despite portal-upload being a sufficient mode of service, the proper officer was required to explore other modes of service prescribed under Section 169 of the GST Act when repeated portal notices/reminders elicited no response, so as to ensure effective service and avoid an ex parte order based on "empty formalities".

(iii) Whether remand for fresh consideration could be ordered subject to a condition of deposit of 25% of the disputed tax amount, with consequential timelines for filing objections and grant of personal hearing.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Ex parte assessment without personal hearing-natural justice

Legal framework: The Court proceeded on the requirement of providing an opportunity of personal hearing before confirming proposals in an assessment where the taxpayer had not responded to the show cause notice.

Interpretation and reasoning: The Court found that the show cause notice was uploaded on the GST portal tab and that the taxpayer asserted lack of awareness and non-receipt of the original notice. Crucially, it was fairly admitted for the revenue that no opportunity of personal hearing was provided prior to passing the impugned order. The Court treated the impugned assessment as having been passed without affording personal hearing while confirming the proposals in the show cause notice.

Conclusion: The impugned assessment order was held liable to be set aside and remanded for fresh consideration due to absence of personal hearing and lack of effective opportunity to respond.

Issue (ii): Sufficiency of portal service vs. duty to ensure effective service through other prescribed modes

Legal framework: The Court referred to Section 169 of the GST Act as providing multiple valid modes of service, in addition to uploading on the portal.

Interpretation and reasoning: While acknowledging that sending notice by uploading in the portal is a sufficient service, the Court held that where repeated reminders through the portal receive no response, the proper officer should apply his/her mind and explore service through other modes prescribed in Section 169, so that service is effective and not a mere formality. The Court reasoned that merely passing an ex parte order by "fulfilling the empty formalities" serves no useful purpose and leads to multiplicity of litigation and wastage of time for the officer, appellate fora, and the Court. The Court further indicated that, in such circumstances, the officer should strictly explore alternate modes under Section 169(1), preferably RPAD, to achieve the object of the Act and ensure effective service.

Conclusion: The Court concluded that there was a lack of effective opportunity in service of notices/orders to the taxpayer, warranting interference with the ex parte assessment and remand with directions for proper notice and personal hearing.

Issue (iii): Conditional remand on deposit of 25% and directions for fresh adjudication

Legal framework: The Court exercised its writ jurisdiction to set aside the assessment and remand the matter, imposing conditions to balance equities.

Interpretation and reasoning: The taxpayer expressed willingness to pay 25% of the disputed tax amount, and the revenue requested remand subject to that payment. The Court accepted this approach and structured the remand with clear timelines, including that the setting aside would take effect from the date of payment.

Conclusion: The impugned order was set aside and the matter remanded for fresh consideration on condition that 25% of the disputed tax amount be paid within four weeks; the taxpayer was directed to file reply/objections with documents within three weeks from such payment; and the authority was directed to issue 14 days' clear notice fixing a personal hearing and thereafter pass orders on merits in accordance with law expeditiously.

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