GST portal service of pre-intimation and SCN for short output tax and excess ITC: ex parte order set aside, remanded.

In a writ challenging an ex parte adjudication under s.73(9) GST for alleged short payment of output tax and excess ITC, the dominant issue was whether the assessee should be denied an opportunity to contest despite electronic service of pre-intimation and SCN on the GST portal. The HC held that, although notices were uploaded and no reply was filed, the assessee's asserted bona fide inability and sufficient cause warranted a justice-oriented approach consistent with principles of natural justice. The ex parte order was set aside and the matter remitted to the adjudicating authority for fresh consideration from the stage of filing reply, subject to costs payable to the welfare fund.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the ex parte adjudication order confirming demand under Section 73(9) of the GST Acts, passed after non-filing of replies to the pre-intimation and show-cause notices, should be set aside and the matter remitted to enable the taxpayer to file a reply and contest the proceedings.

(ii) Whether, in the circumstances of non-participation by the taxpayer, the Court should adopt a "justice oriented approach" by granting one more opportunity subject to costs and directions for fresh consideration with reasonable opportunity of hearing.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Setting aside of ex parte adjudication order and remand for fresh decision

Legal framework (as noticed by the Court): The adjudication was stated to be under Section 73(9) of the GST Acts read with Rule 142(5) of the GST Rules, preceded by a notice under Section 73(5) and a show-cause notice in Form GST DRC-01.

Interpretation and reasoning: The Court treated it as an undisputed fact on record that the taxpayer did not submit replies to the pre-intimation notice or show-cause notice and did not contest the proceedings, which resulted in the ex parte order. While both sides disputed whether notices were actually received/served (taxpayer asserting non-communication; revenue asserting electronic communication via portal/e-mail), the Court did not conclusively decide the service dispute. Instead, it proceeded on the admitted non-participation and the taxpayer's specific assertion that the omission occurred due to bona fide reasons, unavoidable circumstances, and sufficient cause.

Conclusion: The Court set aside the ex parte adjudication order and remitted the matter to the adjudicating authority to the stage of enabling the taxpayer to submit a reply to the show-cause notice, with directions to consider replies/documents and to provide sufficient and reasonable opportunity before proceeding in accordance with law.

Issue (ii): Grant of one more opportunity subject to costs and compliance directions

Legal framework (as applied by the Court): The Court exercised writ jurisdiction to mould relief by remand, coupled with imposition of costs and directions to secure appearance and participation.

Interpretation and reasoning: Emphasising a "justice oriented approach," the Court considered it just and appropriate to afford one more opportunity despite the taxpayer's earlier failure to respond, since the taxpayer asserted sufficient cause for the omission. To balance equities and ensure diligence going forward, the Court imposed costs and fixed a date for appearance without awaiting further notice.

Conclusion: Relief was made conditional on payment of costs of Rs.10,000/- to the High Court Advocate Welfare Fund; the taxpayer was directed to appear on a specified date; and the authority was directed to grant reasonable opportunity and decide afresh in accordance with law.

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