2025 (4) TMI 1308 - HC - GST

Service of SCN - whether service of notice/order by making available in the Common Portal is valid? - HELD THAT - Submission of petitioner that Section 146 of the GST Act does not enable notifying common portal for serving notice/ orders/ communications thus service of notice/ order by making it available in the common portal would not constitute valid mode of service is untenable. Section 146 of GST Act provides that common portal may be notified for carrying out various functions and purpose of the Act. While the Government may in excersise of its power under Section 146 of GST Act identify the portal and notify the purpose for which it is to be employed however the purpose/ functions for which the common portal may be employed in terms of notification issued under Section 146 of the Act is not exhaustive. Sub-clause (d) to sub-section(1) to Section 169 of the GST Act while providing that the decision order summon notice shall be served by making it available in the common portal does not contemplate a notification under Section 146. Section 169 of the Act is a standalone independent provision its operation is not dependent on any notification under Section 146 of the Act. Any doubts as to whether notice or order may be served in the above GST portals as well is unfounded and hypothetical. Conclusion - The construction that service by making it available on the Common Portal is not a valid mode of service is contrary to the express provisions under GST Act. The impugned orders are set aside - The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent within a period of four weeks from the date of receipt of a copy of this order - petition disposed off. As per correction order dated 25-04-2025 the condition of stay order is modified. Now the petitioner is required to deposit 10% of the disputed taxes which was earlier 25% of the disputed tax and the balance shall be refunded to petitioner.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this batch of writ petitions are:

- Whether service of notice, show cause notice, or order by making it available on the GST Common Portal constitutes valid service under the Goods and Services Tax Act, 2017 (GST Act).

- The interpretation and scope of Section 169 of the GST Act regarding modes of service of notices, orders, summons, or other communications.

- The relevance and effect of Section 146 of the GST Act concerning the notification of the Common Portal and whether absence of specific notification for service of notices/orders on the Common Portal invalidates such service.

- The applicability of the Information Technology Act, 2000, particularly Section 13, in determining the time and place of service of electronic records via the Common Portal.

- Whether service by uploading notices/orders on the Common Portal must be accompanied by additional modes such as registered post or speed post to be valid.

- The impact of alleged technical difficulties or lack of computer literacy of taxable persons on the validity of service by uploading on the Common Portal.

- The effect of Rule 142 of the GST Rules regarding issuance of summary versus detailed show cause notices on the validity of service through the Common Portal.

- The procedural consequences and relief available to petitioners challenging the validity of service and the orders passed in adjudication proceedings.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of Service of Notice/Order by Uploading on the GST Common Portal under Section 169 of the GST Act

Legal framework and precedents: Section 169(1) of the GST Act enumerates six alternative modes of service of any decision, order, summons, notice, or other communication under the Act: (a) personal service or by messenger; (b) registered post/speed post/courier; (c) email; (d) making it available on the Common Portal; (e) publication in a newspaper; and (f) affixture if none of the above is practicable. Section 169(2) deems service complete on the date of tender, publication, or affixture as applicable. Section 169(3) provides deemed receipt timelines for service by registered post/speed post. The Court also considered the Division Bench precedent interpreting analogous provisions under the Tamil Nadu General Sales Tax Rules, 1959, which held that modes of service from (a) to (c) are alternative, and only if these are impracticable, modes under (d) and (f) may be resorted to.

Court's interpretation and reasoning: The Court rejected the view that modes (a) to (c) are exclusive and that service by making available on the Common Portal (clause (d)) is only to be resorted to after exhausting modes (a) to (c). The Court held that all modes (a) to (f) under Section 169(1) are alternative modes of service, and no hierarchy or sequential resort is mandated. The Court emphasized that construing the provision otherwise would render the phrase "shall be served by any one of the following modes" redundant, which is impermissible under principles of statutory construction. The Court relied on the Division Bench ruling in Sanjeevi Naidu (1972) which interpreted a similar provision in the Tamil Nadu General Sales Tax Rules to support this conclusion.

Key evidence and findings: The Court noted that the GST Common Portal (www.gst.gov.in) is the designated electronic portal referred to in Section 146 of the GST Act and is used for various functions including registration, payment of tax, and filing returns. The notices/orders in question were uploaded on this portal.

Application of law to facts: Since Section 169 expressly includes making notices/orders available on the Common Portal as a valid mode of service, and the portal used is the notified Common Portal under Section 146, the Court held that service by uploading on the Common Portal is valid and complete when the notice/order enters the portal.

Treatment of competing arguments: The petitioners argued that service is only complete when the notice/order is retrieved by the taxable person, relying on Section 13 of the Information Technology Act, 2000, and that the Common Portal is the designated computer resource of the Department, not the taxable person. The Court disagreed, finding that the taxable person is given unique login credentials, making the Common Portal a designated computer resource for both parties. Therefore, under Section 13 of the IT Act, receipt occurs when the electronic record enters the designated computer resource, i.e., when uploaded on the Common Portal.

The petitioners also contended that the Common Portal is not notified for service of notices/orders under Section 146 and that Rule 142 of the GST Rules only contemplates service of summary notices on the portal. The Court held that Section 169 is a standalone provision independent of Section 146 notifications and that the enabling Act prevails over conflicting rules. Therefore, service of detailed notices/orders on the Common Portal is valid.

The petitioners further submitted that service on the Common Portal should be supplemented by registered post or speed post, especially given technical glitches and lack of computer literacy among taxpayers. The Court acknowledged the hardship but held that such difficulties cannot override the plain language of the statute. The Court noted that the legislature has expressly provided uploading as a valid mode and that the maxim "dura lex sed lex" applies.

Conclusions: Service of notices/orders by making them available on the GST Common Portal is a valid mode of service under Section 169 of the GST Act. Service is complete when the notice/order enters the Common Portal. Additional modes of service such as registered post are not mandatory to validate service by uploading.

Issue 2: Effect of Absence of Specific Notification under Section 146 for Service of Notices/Orders on the Common Portal

Legal framework: Section 146 empowers the Government to notify the Common Portal for facilitating various GST functions, including registration, payment, filing returns, and other prescribed purposes.

Court's interpretation: The Court held that Section 146 empowers notification of the Common Portal for various functions but is not exhaustive or restrictive of the purposes for which the portal may be used. Section 169(1)(d) independently provides for service by making notices/orders available on the Common Portal without requiring a specific notification under Section 146 for this purpose. Thus, absence of a specific notification for service of notices/orders does not invalidate service by uploading on the Common Portal.

Application to facts: The portal www.gst.gov.in is a notified Common Portal under Section 146 and is used to serve notices/orders. Therefore, service on this portal is valid.

Conclusions: Service of notices/orders on the Common Portal is valid notwithstanding the absence of a specific notification under Section 146 for service of notices/orders.

Issue 3: Applicability of Section 13 of the Information Technology Act, 2000 in Determining Time and Place of Service

Legal framework: Section 13 of the IT Act governs the time and place of dispatch and receipt of electronic records. It provides that if the addressee has designated a computer resource for receiving electronic records, receipt occurs when the record enters that resource.

Court's reasoning: The Court found that the Common Portal is a designated computer resource for the taxable person since they have unique login credentials. Therefore, under Section 13(2)(a)(i) of the IT Act, receipt of electronic notice/order occurs when it enters the Common Portal, not when retrieved by the taxable person.

Conclusions: The time of service by electronic means on the Common Portal is the time the notice/order enters the portal, consistent with Section 169 of the GST Act.

Issue 4: Relevance of Rule 142 of the GST Rules Regarding Service of Summary vs. Detailed Notices

Legal framework: Rule 142(1) of the GST Rules contemplates issuance of a summary of the show cause notice in Form DRC-01 electronically.

Court's reasoning: The Court held that Rule 142 does not exclude service of detailed notices/orders on the Common Portal. Section 169 of the GST Act is a standalone provision and overrides any conflicting rule. The enabling Act prevails over delegated legislation.

Conclusions: Service of detailed notices/orders on the Common Portal is valid and not restricted to summary notices as per Rule 142.

Issue 5: Whether Service by Uploading on the Common Portal Must Be Supplemented by Registered Post or Speed Post

Arguments: Petitioners argued that due to technical glitches and lack of computer literacy, service by uploading alone is insufficient and must be supplemented by registered post or speed post.

Court's response: The Court acknowledged hardships but held that such practical difficulties cannot override the statutory provisions. The legislature has expressly provided uploading on the Common Portal as a valid mode of service. The Court cited the maxim "dura lex sed lex" to emphasize that the law must prevail even if harsh.

Conclusions: Service by uploading on the Common Portal is valid without mandatory supplementation by registered post or speed post.

Issue 6: Procedural Relief and Directions on Payment of Disputed Taxes and Remand

Facts and submissions: Petitioners sought remand of the matter to the adjudicating authority to submit objections and challenge the assessment orders, conditioned on payment of a portion of the disputed taxes.

Court's directions: By consent, the Court set aside the impugned orders and directed petitioners to deposit a percentage of the disputed tax (initially 25%, later modified to 10% for some petitions) within four weeks. The Court ordered adjustment of any amounts already paid. Upon compliance, the impugned order would stand treated as a show cause notice, and petitioners were granted four weeks to file objections. The adjudicating authority was directed to consider objections and pass orders after hearing. Failure to comply with the payment or filing objections would result in restoration of the impugned order. The Court also directed lifting of any bank attachments or garnishee proceedings upon compliance.

Additional administrative directions: The Court suggested that the Commissioner of Commercial Taxes issue an interdepartmental circular instructing Assessing Officers to send alert SMS and emails to taxable persons when notices/orders are uploaded on the Common Portal, as an administrative measure to improve awareness, clarifying that such instructions would not affect the validity of service under the law.

3. SIGNIFICANT HOLDINGS

"Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely: ... (d) by making it available on the common portal; ..." (Section 169(1) GST Act)

"The modes of service provided in clauses (a) to (f) to Section 169(1) of the GST Act are alternative modes of service, and no sequential hierarchy is mandated. Service by making available the notice/order on the Common Portal is a valid mode of service and is complete when the notice/order enters the Common Portal."

"The Common Portal is a designated computer resource for both the Department and the taxable person, and receipt of electronic notice/order occurs when it enters this designated computer resource, in accordance with Section 13 of the Information Technology Act, 2000."

"Section 169 of the GST Act is a standalone provision and is not dependent on any notification under Section 146 for the validity of service by making notices/orders available on the Common Portal."

"Hardship faced by taxable persons in accessing the Common Portal or lack of computer literacy cannot override the clear statutory mandate that service by uploading on the Common Portal is valid. The maxim 'dura lex sed lex' applies."

"Rule 142 of the GST Rules, which contemplates issuance of summary show cause notices electronically, does not exclude service of detailed notices/orders on the Common Portal, as Section 169 of the GST Act prevails over conflicting rules."

"Uploading of orders upon the Common Portal constitutes proper mode of service, and the absence of a statutory requirement for alert notifications does not invalidate such service."

"Petitioners challenging the validity of service by uploading on the Common Portal are granted opportunity to deposit a portion of disputed taxes (10% or 25% as applicable) and submit objections, with the impugned order treated as a show cause notice upon compliance."