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2025 (6) TMI 1418 - HC - GSTChallenge to order passed by the respondent dated 27.08.2024 along with the summary order Form GST DRC-07 dated 27.08.2024 - non-affording of an opportunity of personal hearing to the petitioner - Violation of principles of natural justice - 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. Further the original of the said show cause notice was not furnished to the petitioner in person. 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. Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same would 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. This Court is inclined to set aside the impugned order as the same suffers from the violation of principles of natural justice. Further taking into consideration of the fact that the respondent in pursuance of the impugned proceeding already recovered entire disputed tax from the petitioner s bank account this Court is not inclined to impose any condition requiring the petitioner to make any deposit. Conclusion - The impugned order set aside for violation of natural justice service by portal upload alone was insufficient without alternative modes no conditions were imposed on the petitioner due to tax recovery and the matter was remanded for fresh consideration The impugned order passed by the respondent 27.08.2024 along with the summary order Form GST DRC-07 dated 27.08.2024 passed by the Respondent are set aside - the matter is remanded to the respondent for fresh consideration - Petition allowed by way of remand.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Violation of principles of natural justice due to non-affording of personal hearing Relevant legal framework and precedents: The principles of natural justice mandate that a person affected by an adverse order must be given a fair opportunity to present their case, including the right to be heard before passing such order. This is a well-established principle in administrative law and is also embedded within procedural safeguards under the GST Act. Court's interpretation and reasoning: The Court noted that the impugned order was passed without affording any opportunity of personal hearing to the petitioner. The petitioner was unaware of the show cause notice and the order confirming the proposals contained therein, as these were uploaded on the GST portal but not communicated personally or by any other effective mode. Key evidence and findings: The petitioner's claim that the show cause notice and allied communications were uploaded under a different column ("View Additional notices/orders") on the GST portal and remained unnoticed was accepted. The petitioner only became aware of the impugned proceedings when the bank account attachment was effected. Application of law to facts: The Court held that merely uploading the notice on the portal, without more, did not satisfy the requirement of affording an effective opportunity to be heard. The absence of personal hearing constituted a violation of natural justice principles, rendering the impugned order liable to be set aside. Treatment of competing arguments: The respondent did not dispute the non-hearing but contended that the disputed tax had been recovered and thus sought remand for fresh consideration. The Court found this approach insufficient to cure the fundamental procedural lapse. Conclusions: The Court concluded that the impugned order was passed in violation of natural justice and must be set aside. Issue 2: Validity and effectiveness of service by uploading notice on GST portal alone Relevant legal framework and precedents: Section 169 of the GST Act prescribes modes of service of notices and orders, including electronic modes and physical delivery methods such as Registered Post with Acknowledgment Due (RPAD). The law contemplates multiple modes to ensure effective service. Court's interpretation and reasoning: The Court acknowledged that uploading notices on the GST portal is a recognized mode of service. However, it emphasized that when no response is received from the taxpayer through this mode, the tax officer must apply their mind and explore alternative modes of service prescribed under Section 169(1) to ensure effective communication. Key evidence and findings: The officer did not send repeated reminders or attempt alternative modes of service after the petitioner failed to respond to the portal upload. The Court found this approach to be a mere fulfillment of formalities rather than effective service. Application of law to facts: The Court held that service by uploading alone, without follow-up by other prescribed modes when there is no response, does not amount to effective service. This failure undermines the procedural fairness intended under the GST Act. Treatment of competing arguments: The respondent did not present arguments justifying the absence of alternative service attempts. The Court rejected the notion that mere portal upload suffices in all circumstances. Conclusions: The Court ruled that the officer should have explored alternative modes of service, preferably RPAD, to ensure effective notice, failing which the service is ineffective. Issue 3: Setting aside impugned order without imposing conditions given recovery of disputed tax Relevant legal framework and precedents: Courts have discretion in setting aside orders and may impose conditions such as deposits or security to protect revenue interests. However, where disputed tax is already recovered, such conditions may be unnecessary. Court's interpretation and reasoning: The Court noted the respondent's statement that the entire disputed tax amount has been recovered from the petitioner's bank account. Given this, the Court was not inclined to impose any further conditions on the petitioner while setting aside the impugned order. Key evidence and findings: The respondent's admission of full recovery was accepted subject to verification. Application of law to facts: The Court exercised its discretion to set aside the order without requiring the petitioner to make any deposit or furnish security. Treatment of competing arguments: The petitioner sought unconditional setting aside, which the Court granted in light of the recovery. Conclusions: The impugned order was set aside without any conditions on the petitioner. Issue 4: Directions for fresh consideration and opportunity of hearing Relevant legal framework and precedents: Principles of natural justice and statutory mandates require that before any adverse order is passed, the affected party must be given a reasonable opportunity to respond and be heard. Court's interpretation and reasoning: The Court directed that the matter be remanded to the respondent for fresh consideration. The petitioner was directed to file a reply with supporting documents within two weeks of receipt of the order. The respondent was directed to consider the reply and issue a fresh notice affording a personal hearing of 14 clear days before deciding the matter in accordance with law. Application of law to facts: These directions ensure compliance with natural justice and statutory provisions, rectifying the procedural lapses in the original proceedings. Conclusions: The Court mandated fresh proceedings with due opportunity of hearing and proper service of notices. 3. SIGNIFICANT HOLDINGS The Court held that:
Core principles established include:
Final determinations on each issue were that the impugned order was set aside for violation of natural justice, service by portal upload alone was insufficient without alternative modes, no conditions were imposed on the petitioner due to tax recovery, and the matter was remanded for fresh consideration with due opportunity of hearing.
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