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2025 (7) TMI 201 - HC - GSTViolation of principles of natural justice - service of notice - all notices/communications were uploaded by the respondent under the View Additional Notices and Orders column in the GST common portal - 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. 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 - 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 06.02.2025 passed by the respondent. The impugned order dated 06.02.2025 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.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity and Effectiveness of Service by Uploading Notices on GST Portal Relevant legal framework and precedents: The GST Act, specifically Section 169, prescribes modes of service of notices and orders, including electronic modes such as uploading on the GST portal, as well as other modes like Registered Post with Acknowledgment Due (RPAD). Precedents recognize electronic service as valid but emphasize the necessity of effective communication to the taxpayer. Court's interpretation and reasoning: The Court acknowledged that uploading notices on the GST portal is a recognized mode of service and generally sufficient. However, it emphasized that mere uploading without ensuring the taxpayer's awareness or response does not amount to effective service. The Court noted that the officer must apply their mind and consider alternative modes of service if the taxpayer fails to respond to portal notices. Key evidence and findings: The petitioner contended they were unaware of the show cause notice uploaded on the portal and did not receive the original notice by any other means. The respondent admitted no personal hearing was given, and notices were only uploaded online. Application of law to facts: The Court found that the respondent's reliance solely on portal uploading did not constitute effective service, particularly when repeated reminders failed to elicit any response from the petitioner. The Court held that the officer should have explored alternative modes of service prescribed under Section 169 to ensure effective communication. Treatment of competing arguments: The respondent argued that uploading on the portal was sufficient and the petitioner failed to avail the opportunity. The Court balanced this by recognizing the sufficiency of portal service in principle but underscored the necessity of effective notice, which was lacking here. Conclusion: Service solely by uploading on the GST portal without additional efforts to ensure notice is effective is inadequate, particularly when the taxpayer does not respond. Issue 2: Denial of Opportunity of Personal Hearing and Its Consequences Relevant legal framework and precedents: Principles of natural justice require that before passing an adverse order, the affected party must be given an opportunity of hearing. This is a well-established legal norm under administrative law and the GST procedural framework. Court's interpretation and reasoning: The Court found that no personal hearing was granted to the petitioner before the impugned order was passed. This absence was a significant procedural lapse, rendering the order vulnerable to challenge. Key evidence and findings: The respondent conceded that no personal hearing was provided. The petitioner sought an opportunity to be heard and was willing to pay 25% of the disputed tax amount as a condition for reconsideration. Application of law to facts: The Court held that passing an ex parte order without hearing the petitioner violated the principles of natural justice and statutory requirements. The impugned order, therefore, could not stand in its present form. Treatment of competing arguments: The respondent acknowledged the procedural lapse and requested remand of the matter subject to payment of 25% of the disputed tax. The Court accepted this approach as fair and just. Conclusion: The denial of personal hearing vitiated the impugned order, necessitating its setting aside and remand for fresh consideration after affording the petitioner a hearing. Issue 3: Obligation to Explore Alternative Modes of Service under Section 169 of the GST Act Relevant legal framework and precedents: Section 169(1) of the GST Act prescribes various modes of service of notices and orders, including electronic modes and physical modes such as RPAD. The law mandates effective service to ensure the taxpayer is aware of proceedings. Court's interpretation and reasoning: The Court emphasized that when notices served through one mode (e.g., GST portal uploading) do not elicit any response, the officer must explore alternative modes of service to fulfill the object of effective communication. Merely fulfilling formalities without ensuring actual notice is insufficient and leads to unnecessary litigation. Key evidence and findings: The petitioner did not respond to portal notices, and no alternative modes of service were employed. The Court found this approach deficient and contrary to the spirit of Section 169. Application of law to facts: The Court directed that the officer must consider other modes such as RPAD to ensure effective service, thereby preventing ex parte orders based on ineffective notice. Treatment of competing arguments: The respondent did not dispute the necessity of alternative service modes but had not applied them. The Court's direction aligns with the statutory mandate and principles of natural justice. Conclusion: Officers must actively explore alternative modes of service under Section 169 when initial electronic service fails to secure taxpayer response. Issue 4: Remand of the Matter and Conditions for Fresh Consideration Relevant legal framework and precedents: Courts have the power to set aside administrative orders and remit matters for fresh consideration, especially where procedural lapses have occurred, subject to conditions ensuring compliance and fairness. Court's interpretation and reasoning: Considering the petitioner's willingness to pay 25% of the disputed tax amount, the Court found it appropriate to set aside the impugned order and remit the matter to the respondent for fresh adjudication after affording a personal hearing. Key evidence and findings: The petitioner's offer to pay a portion of the tax and the respondent's acceptance of this condition formed the basis for the Court's order. Application of law to facts: The Court ordered that the petitioner pay 25% of the disputed tax within four weeks, file their reply within three weeks thereafter, and be granted a personal hearing with a 14-day clear notice before fresh orders are passed. Treatment of competing arguments: Both parties consented to this approach, and the Court found it equitable and in the interest of justice. Conclusion: The impugned order was set aside, and the matter remanded with specific directions to ensure procedural fairness and substantive adjudication on merits. 3. SIGNIFICANT HOLDINGS The Court held:
Core principles established include:
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