In a significant ruling, the High Court has strongly cautioned against passing ex parte GST assessment orders based solely on notices uploaded on the GST portal. The decision came in response to a writ petition filed by a taxpayer company challenging an assessment order for Financial Year 2018-19, issued by the Commercial Tax Officer on January 22, 2024.
đ¨ Background of the Case
The petitioner contended that the show cause notice (SCN) was never served through physical means and was merely uploaded on the GST common portal, of which the petitioner remained unaware. As a result, no reply was submitted, and an ex parte assessment order was issued, mechanically validating the demands made in the notice.
The petitioner argued that the lack of personal hearing and proper service of notice amounted to a violation of principles of natural justice. In a goodwill gesture, the petitioner offered to deposit 25% of the disputed tax amount if the matter were remanded for fresh consideration.
The government counsel also acknowledged this voluntary submission and agreed that the petitionerâs request could be considered fairly.
âď¸ Key Legal Issue
The primary legal question before the Court was:
Does uploading a notice only on the GST portalâwithout using other prescribed modes under Section 169 of the CGST Actâqualify as valid service of notice under the law?
đď¸ High Court Verdict
The Court quashed the impugned order, ruling that while uploading a notice on the GST portal is a valid method, it must also effectively communicate the contents to the taxpayer. If thereâs no response after repeated uploads, the tax authorities are obligated to use alternative methods under Section 169(1), such as:
- Registered Post with Acknowledgement Due (RPAD)
- Hand delivery
Passing an order without ensuring proper communication is merely an “empty formality” and violates natural justice, the Court observed. It further added that such flawed processes trigger avoidable litigation and undermine trust in tax administration.
đ Remand with Conditions
The matter was remanded back for reconsideration with the following directions:
- The petitioner must deposit 25% of the disputed tax within two weeks.
- A detailed reply along with all supporting documents must be submitted in the following two weeks.
- The tax officer must provide a clear 14-day notice for a personal hearing.
- A fresh, reasoned order should be passed in accordance with law after considering the taxpayer’s reply.
The Court disposed of the writ petition with no order as to costs, and all connected miscellaneous applications were closed.
đ Legal Takeaway
This judgment reaffirms the principle that procedural fairness and proper service of notice are essential components of a valid GST adjudication process. Merely uploading notices on the GST portal is not enoughâtax officers must ensure that notices are effectively served to prevent ex parte decisions and ensure justice.