2025 (6) TMI 1340 - HC - GST

Violation of principles of natural justice - all notices/communications were uploaded by the respondent under the View Additional Notices and Orders column in the GST common portal - petitioner was not aware of the said notices - impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner - petitioner is willing to pay 25% of the disputed tax amount to the respondent - HELD THAT - In the case on hand it is evident that the show cause notice was uploaded on the GST Portal Tab. According to the petitioner he was not aware of the issuance of the said 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. 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 - Thus when there is no response from the tax payer to the notice sent through a particular mode the Officer who is issuing notices should strictly explore the possibilities of sending notices through some other mode as prescribed in Section 169(1) of the Act preferably by way of RPAD which would ultimately achieve the object of the GST Act. Therefore this Court finds that there is a lack of opportunities being provided to serve the notices/orders etc. effectively to the petitioner. Further it was submitted by the learned counsel for the petitioner that the petitioner is willing to pay 25% of the disputed tax amount to the respondent. In such view of the matter this Court is inclined to set aside the impugned order dated 24.12.2023passed by the respondent - The impugned order dated 24.12.2023 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 25% of disputed tax amount to the respondent within a period of four weeks from the date of receipt of a copy of this order. The setting aside of the impugned order will take effect from the date of payment of the said amount. Petition disposed off by way of remand.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether service of show cause notices and communications by uploading on the GST common portal constitutes effective and valid service under the GST Act.

- Whether the petitioner was afforded a reasonable opportunity of personal hearing before passing the impugned order.

- Whether the impugned order passed without personal hearing and effective service of notice is liable to be set aside.

- The procedural obligations of the tax authorities under Section 169 of the GST Act regarding modes of service of notices.

- The appropriateness of remanding the matter back to the respondent for fresh consideration on condition of partial payment of disputed tax amount by the petitioner.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity and Effectiveness of Service of Notices via GST Portal Uploads

The Court examined the legal framework under the GST Act, particularly Section 169(1), which prescribes modes of service of notices including electronic modes and physical delivery methods such as Registered Post with Acknowledgment Due (RPAD). The respondent had uploaded the show cause notice and related communications on the GST common portal, which is recognized as a mode of electronic service.

The petitioner contended that they were unaware of the uploaded notices and did not receive any physical or alternative communication. The Court acknowledged that while uploading notices on the portal is a sufficient mode of service in principle, reliance solely on this method without ensuring the taxpayer's awareness may not constitute effective service. The Court emphasized that mere formal compliance by uploading notices, without ensuring actual receipt or knowledge by the taxpayer, would amount to "fulfilling the empty formalities."

The Court reasoned that the tax officer, upon receiving no response from the petitioner to the notices served electronically, should have exercised due diligence and explored alternative modes of service as prescribed under Section 169(1), preferably by RPAD, to ensure effective communication. This approach aligns with the object of the GST Act to provide fair opportunity and prevent unnecessary litigation arising from defective service.

Issue 2: Absence of Opportunity of Personal Hearing Before Passing the Impugned Order

The petitioner asserted that no personal hearing was granted prior to the passing of the impugned order dated 24.12.2023. The respondent candidly admitted that no opportunity of personal hearing was provided. The Court found that the impugned order was passed ex parte, confirming the proposals contained in the show cause notice without affording the petitioner a chance to present their case.

The Court underscored the fundamental principle of natural justice that a person should be given an opportunity to be heard before adverse orders are passed. The absence of personal hearing in the present case rendered the impugned order procedurally infirm and liable to be set aside.

Issue 3: Remedial Directions and Conditions for Fresh Consideration

The petitioner expressed willingness to pay 25% of the disputed tax amount as a condition for reconsideration. The respondent agreed to remit the matter back subject to this payment. The Court found this approach reasonable and conducive to expeditious resolution.

The Court set aside the impugned order and remanded the matter for fresh consideration on the condition that the petitioner shall pay 25% of the disputed tax amount within four weeks. Upon such payment, the petitioner is directed to file their reply/objections with supporting documents within three weeks. The respondent is then mandated to issue a clear 14-day notice fixing the date for personal hearing and thereafter pass orders on merits after hearing the petitioner.

This remedial scheme ensures adherence to principles of fair procedure, effective service of notices, and the opportunity for the petitioner to be heard, thereby upholding the rule of law and minimizing multiplicity of litigation.

3. SIGNIFICANT HOLDINGS

- "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."

- The Court established that effective service under the GST Act requires active efforts by the tax authorities to ensure the taxpayer's awareness, including resort to alternative modes of communication if initial electronic service is unacknowledged.

- The fundamental principle of natural justice mandates that no adverse order be passed without affording the taxpayer a reasonable opportunity of personal hearing.

- The Court's final determination was to set aside the impugned order and remit the matter for fresh consideration on condition of partial payment by the petitioner, with clear procedural directions to ensure effective notice, personal hearing, and adjudication on merits.