In a significant judgment, the Madras High Court has ruled that issuing notices solely through email does not constitute valid service, especially when it denies an opportunity for the recipient to respond. The order comes as a major relief to Roop Rajat Exports, a small business entity, which had challenged a tax order issued without proper notice.
Background of the Case
The petitioner, Roop Rajat Exports, filed a legal challenge against the order dated July 18, 2023, issued by the Assistant Commissioner. The petitioner argued that the notice was sent only through the company’s registered email address and no physical copy was served. As a small business entity, the company failed to notice the email and, therefore, could not file a timely response or objection.
The petitioner’s counsel contended that passing the final order without granting a personal hearing violated the principles of natural justice. The petitioner further expressed readiness to deposit 25% of the disputed tax amount as a condition for reconsideration of the matter.
Madras High Court’s Observations and Verdict
The Hon’ble Court acknowledged that the notice was indeed sent via email but was not effectively received by the petitioner. Given the absence of physical service and the lack of opportunity for a proper hearing, the Court concluded that the proceedings suffered from procedural lapses.
In light of this, the Madras High Court set aside the tax order passed against Roop Rajat Exports and issued the following directions:
- The petitioner must deposit 25% of the disputed tax amount within four weeks.
- The petitioner is required to file a detailed reply or objection along with supporting documents within three weeks thereafter.
- The tax authorities are instructed to provide a 14-day notice for a personal hearing before passing any fresh order.
- A new order must be passed only after granting the petitioner a fair opportunity to present their case.
Key Takeaways
This ruling emphasizes the importance of following due process and ensuring effective communication, especially in tax-related matters. It reinforces that email alone cannot be considered sufficient service of notice if it deprives the recipient of a chance to respond.
The judgment serves as a reminder for tax authorities and businesses alike to ensure that all procedural requirements, including proper service of notice, are strictly adhered to in compliance with principles of natural justice.