Anant Wire Industries Vs Sales Tax Officer Class II/AVATO (Delhi High Court)

Non-Compliance with Proper Service of Show Cause Notice on GST Portal: Delhi High Court Quashes Impugned Order and Grants Relief to TaxpayerLegal Issues and Case Background 1. The matter pertains to a petition filed under Articles 226 and 227 of the Constitution of India. The petitioner challenges the order dated 21st February 2024, which was issued pursuant to a Show Cause Notice (SCN) dated 5th September 2023. The petitioner contends that the SCN was never communicated.2. According to the petitioner, the SCN was uploaded on the GST portal under the heading ‘Additional Notices and Orders’, making it inaccessible and unnoticed. This procedural lapse, as claimed by the petitioner, violates Section 169 of the CGST Act, 2017 concerning the proper mode of serving notices.Arguments by the Petitioner3. The petitioner relies heavily on judgments in similar cases, including Kamla Vohra v. Sales Tax Officer Class II and ACE Cardiopathy Solutions (P.) Ltd. v. Union of India. These cases establish that merely uploading notices under ambiguous categories on the GST portal does not constitute valid service.4. It was further argued that Section 169 specifies recognized methods of serving notices, including delivery by hand, registered post, or email to the registered address. The petitioner asserts that none of these methods were adhered to.Observations of the Court5. The Hon’ble Court examined the issue of whether placing SCNs under the ‘Additional Notices and Orders’ section of the GST portal satisfies the requirements of service under Section 169 of the CGST Act.6. The court referred to earlier rulings, including ACE Cardiopathy Solutions (P.) Ltd. v. Union of India and East Coast Constructions and Industries Ltd. v. Assistant Commissioner (ST), which highlight deficiencies in the GST portal’s design during the relevant period.7. In Kamla Vohra v. Sales Tax Officer Class II, it was held that uploading SCNs in less accessible sections of the GST portal creates avoidable confusion. The decision emphasized the need for notices to be placed prominently under the ‘View Notices and Orders’ tab.8. The Delhi High Court reiterated that an affidavit confirming non-receipt of SCNs strengthens the petitioner’s claim. The petitioner in the present case has submitted an affidavit dated 19th December 2024, asserting that neither the SCN nor the subsequent order was served via email or physical means.Decision9. In light of the precedents and the affidavit submitted, the Court found merit in the petitioner’s claim. It ruled that the procedural lapses in serving the SCN denied the petitioner a fair opportunity to respond.10. Accordingly, the impugned order dated 21st February 2024 was quashed, and the matter was remanded to the appropriate authority for reconsideration.11. The petitioner has been granted 30 days to respond to the SCN dated 5th September 2023. The concerned authority is directed to conduct a fresh hearing and pass an order within three months of the hearing date.Key Precedents Cited1. Kamla Vohra v. Sales Tax Officer Class II– Held that notices uploaded in non-intuitive categories of the GST portal do not meet the service requirements under Section 169.2. ACE Cardiopathy Solutions (P.) Ltd. v. Union of India– Established that procedural lapses in serving notices via the GST portal could vitiate subsequent orders.3. East Coast Constructions and Industries Ltd. v. Assistant Commissioner (ST)– The Madras High Court directed improvements in the GST portal design to eliminate confusion over notice categories.ConclusionThe Court emphasized that compliance with statutory provisions, including proper service of notices, is essential to uphold the principles of natural justice. By granting the petitioner an opportunity to respond, the Court has sought to ensure fair adjudication while holding tax authorities accountable for procedural lapses.DispositionThe petition was allowed, and the impugned order was set aside. All pending applications were disposed of.