2025 (5) TMI 1610 - HC - GST

Extension of time period - Show Cause Notice not uploaded on the portal - Validity of Order issued beyond the prescribed limitation period as fixed by Notification No. 56/2023-Central Tax - HELD THAT - As per the Department the Show Cause Notice was not uploaded on the portal. The pre-notice consultation was also dispatched on 16th October 2023 and the Show Cause Notice was dispatched on 29th November 2023. However ld. Senior Standing Counsel concedes that the two documents were not uploaded on the portal. A perusal of the hard copy of the impugned order which has been handed across by the Petitioner shows that the same was signed on 30th April 2024 but the Form DRC-07 was uploaded on 5th May 2024. Accordingly it is deemed appropriate to direct that the GST Department ought to create a proper SOP for following a consistent practice of a) Uploading all notices orders and communications on the portal; Secondly - by sending all such communications notices and orders through email on the registered email address; Finally - the said correspondence could also be sent by speed post; b) In respect of lack of signatures and DIN Numbers on SCNs and on the Orders-in-Original the Department ought to ensure that the name of the Officer the digital signature or the physical signature along with the date and the DIN Number ought to be made available on all the SCNs and orders that are passed. c) One of the grievances usually raised is that there is no consistency between the date of the order and the date when it was uploaded/issued on the portal. Grievances are thus raised as to the date on which the order itself is passed. The GST Department should make an endeavour to ensure that on the date when the order is passed it is uploaded on the very same day. At this stage Ms. Benjamin submits that the GST Department has a published protocol and GST officials are bound to comply with the protocol as mandated. Let the said existing protocol if any be considered in the light of the above directions and if any changes need to be made or if one SOP needs to be prepared and issued comprehensively covering all the above issues the same be done.

Summary

1. ISSUES PRESENTED and CONSIDERED

The Court considered two core legal questions:

(i) Whether the Show Cause Notice (SCN) dated 29th November 2023 was duly communicated to the Petitioner;

(ii) Whether the impugned order dated 5th May 2024 was issued beyond the prescribed limitation period as fixed by Notification No. 56/2023-Central Tax dated 28th December 2023, which mandated the last date for issuance as 30th April 2024.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Communication of the Show Cause Notice

The legal framework governing issuance and communication of SCNs under the GST regime requires that notices be properly served to the concerned party, ensuring fair opportunity to respond. The GST Department's procedural norms emphasize uploading such notices on the official portal and/or sending them through registered email or speed post to ensure effective communication.

In the present case, the Department conceded that neither the SCN dated 29th November 2023 nor the pre-notice consultation dispatched on 16th October 2023 was uploaded on the GST portal. The Department admitted the absence of digital communication and relied solely on dispatch by speed post. The Petitioner contended non-receipt of the SCN, which was a fundamental procedural infirmity.

The Court noted a recurring procedural lapse in GST proceedings, where notices and communications are not consistently uploaded on the portal or sent via email, but only dispatched by speed post. This inconsistency undermines the principles of transparency and effective communication, essential for due process.

The Court observed that the absence of portal upload and email dispatch rendered the communication incomplete and deficient, thereby prejudicing the Petitioner's right to be heard. The lack of signatures and Digital Identification Numbers (DIN) on SCNs further compounded procedural irregularities, affecting the authenticity and traceability of the documents.

The Court's reasoning emphasized that effective communication of notices is a sine qua non for valid proceedings and that the Department's failure to adhere to prescribed mechanisms vitiated the process.

Issue (ii): Limitation for issuance of the impugned order

Notification No. 56/2023-Central Tax dated 28th December 2023 prescribed 30th April 2024 as the last date for issuance of orders in relation to the subject matter. The impugned order was physically signed on 30th April 2024 but was uploaded on the portal only on 5th May 2024.

The Petitioner challenged the order on the ground that the delay in uploading amounted to issuance beyond the limitation period, rendering the order invalid.

The Court scrutinized the distinction between the date of signing the order and the date of uploading it on the portal. The Court recognized that the date of passing the order, i.e., the date of signing, is the operative date for limitation purposes. However, the Court also highlighted the practical difficulties and grievances arising from discrepancies between the order date and the portal upload date.

The Court noted that inconsistent practices by the GST Department in uploading orders cause confusion regarding the effective date of the order, which impacts the rights of the parties and the limitation period for challenging such orders.

While the Court did not expressly invalidate the order on this ground, it underscored the necessity for the Department to ensure that orders are uploaded on the same date they are passed to avoid such disputes.

Procedural and Administrative Issues Noticed

The Court identified systemic procedural lapses in the GST Department's handling of communications and orders:

- Absence of a Standard Operating Procedure (SOP) mandating consistent uploading of all notices, orders, and communications on the GST portal;

- Failure to send communications via registered email addresses alongside speed post;

- Lack of signatures and DIN numbers on SCNs and Orders-in-Original, impairing authenticity;

- Discrepancies between the date of passing orders and the date of uploading on the portal, leading to confusion on limitation and validity.

The Court directed the GST Department to formulate and implement a comprehensive SOP addressing these issues, including mandatory portal uploads, email communications, physical dispatch, and ensuring all documents bear the name, signature (digital or physical), date, and DIN number of the issuing officer.

The Court also mandated the Department to file a short affidavit detailing compliance with these directions and the facts specific to the present case.

Pending compliance, the Court restrained the Department from taking any coercive action against the Petitioner.

3. SIGNIFICANT HOLDINGS

The Court's crucial legal reasoning includes the following verbatim observations:

"In a number of matters relating to the GST Department, there are certain procedural issues that the Court has noticed: firstly, that the communications and notices are not duly uploaded on the portal or sent by email. They are only sent by speed post. Secondly, there is no consistency in the practice being followed by the GST Department."

"Accordingly, it is deemed appropriate to direct that the GST Department ought to create a proper SOP for following a consistent practice of: a) Uploading all notices, orders and communications on the portal; Secondly - by sending all such communications, notices and orders through email on the registered email address; Finally - the said correspondence could also be sent by speed post; b) In respect of lack of signatures and DIN Numbers on SCNs and on the Orders-in-Original, the Department ought to ensure that the name of the Officer, the digital signature or the physical signature along with the date and the DIN Number ought to be made available on all the SCNs and orders that are passed."

"One of the grievances usually raised is that there is no consistency between the date of the order and the date when it was uploaded/issued on the portal. Grievances are thus raised as to the date on which the order itself is passed. The GST Department should make an endeavour to ensure that on the date when the order is passed, it is uploaded on the very same day."

On the question of limitation, the Court implicitly held that the operative date for limitation is the date on which the order is signed/passed rather than the date of uploading, but stressed the importance of contemporaneous uploading to avoid ambiguity.

The Court's directions establish core principles of procedural fairness, transparency, and consistency in administrative processes under the GST regime. The judgment underscores the necessity of technological integration (portal uploads and email communication) alongside traditional methods (speed post) for effective service of notices and orders.

Final determinations include:

- The SCN