2025 (6) TMI 2027 - HC - GST

Violation of principles of natural justice - proper service of notice - neither the show cause notices nor the impugned order of assessment has been served by tendering to the petitioner or by registered post instead it was uploaded in the common portal under the head Additional Notices and Orders tab - petitioner is ready and willing to pay 25% of the disputed tax - HELD THAT - It is evident that the impugned show cause notice was uploaded on the GST Portal Tab. According to the petitioner the petitioner was not aware of the issuance of the show cause notice issued through the GST Portal and the original of the said show cause notice was not furnished to them. In such circumstances this Court is of the view that the impugned assessment order came to be passed without affording any opportunity of personal hearing to the petitioner confirming the proposals contained in the show cause notice. No doubt sending notice by uploading in portal is a sufficient service but the Officer who is sending the repeated reminders inspite of the fact that no response from the petitioner to the show cause notices etc. the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act which are also the valid mode of service under the Act otherwise it will not be an effective service rather it would only fulfilling the empty formalities. Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations not only wasting the time of the Officer concerned but also the precious time of the Appellate Authority/Tribunal and this Court as well. This Court finds that there is a lack of opportunities being provided to serve the notices/orders etc. effectively to the petitioner. This Court is inclined to set-aside the impugned order - the matter is remanded to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

• Whether service of show cause notices and assessment orders by uploading them on the GST common portal constitutes valid and effective service under the GST Act.
• Whether the petitioner was afforded a meaningful opportunity of personal hearing before passing the impugned assessment order.
• Whether the assessing authority is obligated to explore alternative modes of service prescribed under Section 169 of the GST Act, particularly when there is no response from the taxpayer to notices sent via the GST portal.
• Whether the impugned order passed without effective service and opportunity of hearing is liable to be set aside and the matter remanded for fresh consideration.

2. ISSUE-WISE DETAILED ANALYSIS

Validity and Effectiveness of Service by Uploading on GST Portal

The legal framework governing service of notices under the GST Act is primarily contained in Section 169(1), which prescribes modes of service including tendering the notice to the person, sending by registered post, or any other prescribed manner. The Court acknowledged that uploading notices on the GST common portal is recognized as a mode of service and can be sufficient in certain circumstances.

However, the Court emphasized that mere uploading on the portal, without ensuring that the taxpayer is aware of the notice, does not amount to effective service. The petitioner contended that they were unaware of the issuance of the show cause notice uploaded on the portal and had not received the original notice by any other mode such as registered post or personal delivery.

The Court held that while uploading on the portal is a valid mode of service, it cannot be the sole means relied upon when the taxpayer does not respond or acknowledge receipt. The assessing officer must apply their mind and explore alternative modes of service as prescribed under Section 169(1), such as sending notices by registered post with acknowledgment due (RPAD), to ensure effective communication.

Opportunity of Personal Hearing

The petitioner was issued a show cause notice and was granted an opportunity of personal hearing, but the petitioner neither filed a reply nor availed the hearing opportunity. Despite this, the petitioner argued that they were unaware of the proceedings due to lack of effective service.

The Court noted that the impugned assessment order was passed confirming the proposals contained in the show cause notice without affording a proper opportunity of personal hearing, as the petitioner was not effectively served. The Court underscored the principle that passing an ex parte order based on mere formal compliance without ensuring meaningful participation by the taxpayer defeats the object of the GST Act and leads to avoidable litigation.

Obligation of Assessing Officer to Explore Alternative Modes of Service

The Court elaborated on the duty of the assessing officer to not merely rely on uploading notices on the portal but to explore other modes of service when there is no response from the taxpayer. The Court held that the officer should apply their mind and consider sending notices by RPAD or other prescribed modes to achieve effective service and ensure that the taxpayer is aware of the proceedings.

This approach is necessary to avoid the passing of ex parte orders based on empty formalities, which do not serve the purpose of the law and result in multiplicity of litigation, wasting the time of tax authorities and judicial forums.

Setting Aside the Impugned Order and Remanding the Matter

Given the lack of effective service and meaningful opportunity of hearing, the Court found it just and proper to set aside the impugned assessment order dated 27.12.2023. The Court directed the petitioner to deposit 25% of the disputed tax, which the petitioner had voluntarily offered, within two weeks of receipt of the order.

Subsequently, the petitioner was directed to file a reply along with supporting documents within two weeks. The assessing authority was then mandated to consider the reply, issue a clear 14-day notice affording an opportunity of personal hearing, and decide the matter in accordance with law.

The Court's directions ensure compliance with principles of natural justice and statutory requirements for effective service and hearing, thereby safeguarding the taxpayer's rights and the integrity of the adjudication process.

3. SIGNIFICANT HOLDINGS

The Court held:

"No doubt sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only fulfilling the empty formalities."

"Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well."

Core principles established include:

• Uploading notices on the GST portal is a valid mode of service but not necessarily sufficient if the taxpayer remains unaware.
• Assessing officers must explore alternative modes of service prescribed under Section 169(1) when there is no response from the taxpayer.
• Effective service and meaningful opportunity of personal hearing are essential prerequisites before passing an assessment order.
• Ex parte orders based on mere formal compliance without ensuring effective service and hearing are liable to be set aside.

Final determinations:

• The impugned assessment order dated 27.12.2023 was set aside for lack of effective service and opportunity of hearing.
• The matter was remanded to the assessing authority for fresh consideration after the petitioner deposits 25% of the disputed tax and files a reply.
• The assessing authority was directed to issue a clear 14-day notice affording personal hearing and decide the matter in accordance with law.