2025 (6) TMI 1788 - HC - GST

Proper service of SCN - SCN was issued to the petitioner by uploading the same in the GST Portal without serving physical copy of the same to the petitioner - Violation of principles of natural justice - HELD THAT - In the present case it is stated by the petitioner that since the impugned assessment order was uploaded in the GST portal without serving the physical copy of the same to the petitioner the petitioner was unaware of the same and only after the receipt of the recovery notice from the 3rd Respondent the petitioner came to know of the impugned assessment order and therefore they could not file appeal within time. Considering the facts and circumstances of the case this Court is of the view that the reasons assigned by the petitioner for delay in filing the appeal appears to be genuine. Therefore this Court is inclined to set aside the impugned order passed by the 2nd respondent dated 03.06.2025 is set aside and condone the delay of 129 days in filing the Appeal before the 2nd Respondent - Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the petitioner was duly served with the impugned assessment order and show cause notice, given that these were uploaded on the GST portal without physical service.
• Whether the delay of 129 days in filing the appeal against the assessment order can be condoned on the ground of non-receipt of the physical copy of the order.
• Whether the appellate authority (2nd respondent) has the power to condone delay beyond the statutory limitation period.
• The appropriate remedy and directions to be issued in light of the petitioner's grievance regarding non-service and delayed appeal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of service of the assessment order and show cause notice by uploading on GST portal without physical service

Relevant legal framework and precedents: The GST procedural framework mandates issuance of show cause notices and assessment orders. Typically, service of such orders is effected either by physical delivery or by electronic means, provided the recipient is duly notified. The principles of natural justice require that a party must have knowledge of the proceedings against it to effectively exercise its right of appeal.

Court's interpretation and reasoning: The Court noted that the petitioner was not physically served with either the show cause notice dated 28.08.2024 or the assessment order dated 17.10.2024. Both documents were merely uploaded on the GST portal. The petitioner asserted ignorance of these orders until receipt of a recovery notice from the 3rd respondent, which triggered awareness of the assessment order.

Key evidence and findings: The petitioner's uncontested submission that the orders were not physically served and only uploaded online was accepted. The Court observed that mere uploading without ensuring effective communication or physical service deprived the petitioner of the opportunity to respond or appeal timely.

Application of law to facts: The Court emphasized the necessity of effective service for the exercise of statutory rights. Since the petitioner was unaware of the orders due to lack of physical service, the procedural requirement of notice was not satisfied in spirit.

Treatment of competing arguments: The respondents did not dispute the mode of service but contended that the appeal was barred by limitation and the appellate authority lacked power to condone delay. The Court acknowledged these contentions but prioritized the petitioner's right to be heard.

Conclusion: The Court found the petitioner's claim of non-service to be genuine and sufficient to justify relief.

Issue 2: Condonation of delay in filing appeal

Relevant legal framework and precedents: The limitation for filing appeals under the GST regime is prescribed by statute. Appellate authorities have limited power to condone delays, often restricted by statutory provisions. However, courts have discretion to condone delay in appropriate cases, especially where procedural lapses or denial of natural justice occur.

Court's interpretation and reasoning: The petitioner filed the appeal 129 days late, explaining the delay by lack of knowledge of the order. The Court found this explanation to be a valid ground for condonation of delay, as the petitioner was effectively denied the opportunity to appeal within time due to non-service.

Key evidence and findings: The timeline of events showed the petitioner became aware of the order only after receiving the recovery notice. The appeal was filed immediately thereafter, albeit delayed by 129 days.

Application of law to facts: The Court applied the principle that limitation periods begin to run only when the party has knowledge of the order. Since the petitioner was unaware, the delay was excusable.

Treatment of competing arguments: The respondents argued that the appellate authority had no power to condone delay beyond limitation and that the appeal was rightly rejected. The Court distinguished between the appellate authority's powers and the Court's inherent jurisdiction to condone delay in writ proceedings.

Conclusion: The Court exercised its discretion to condone the delay of 129 days in filing the appeal.

Issue 3: Power of appellate authority to condone delay

Relevant legal framework and precedents: Statutory provisions under GST law delineate the powers of appellate authorities regarding condonation of delay. Typically, such powers are circumscribed by the statute, and beyond a certain period, condonation may not be permissible.

Court's interpretation and reasoning: The Court acknowledged the submission that the 2nd respondent lacked power to condone delay beyond the limitation period. However, the Court clarified that this limitation does not restrict the High Court's jurisdiction under Article 226 to condone delay in writ jurisdiction.

Key evidence and findings: The rejection of the appeal by the 2nd respondent was solely on the ground of delay without considering the merits.

Application of law to facts: The Court set aside the order rejecting the appeal and directed the appellate authority to admit the appeal and decide on merits after condonation of delay.

Treatment of competing arguments: The Court balanced the statutory limitations on the appellate authority with the petitioner's right to be heard and judicial review powers of the High Court.

Conclusion: The Court held that while the appellate authority may lack power to condone delay, the High Court can exercise its jurisdiction to condone delay and direct the appeal to be heard on merits.

Issue 4: Appropriate remedy and directions

Court's reasoning: The Court set aside the impugned order rejecting the appeal and condoned the delay subject to payment of a nominal amount of Rs. 5,000/- as a condition precedent to the setting aside taking effect. The Court directed the appellate authority to admit the appeal and decide on merits after providing sufficient opportunity to the petitioner, and to do so expeditiously.

Application of law to facts: The condition of payment was imposed as a measure to ensure seriousness and compliance. The direction to dispose of the appeal on merits upholds principles of natural justice and fair adjudication.

Conclusion: The Court provided a balanced remedy, safeguarding the petitioner's rights while ensuring procedural discipline.

3. SIGNIFICANT HOLDINGS

The Court held:

"The reasons assigned by the petitioner for delay in filing the appeal appears to be genuine."

"The imp