Neelgiri Machinery Vs Commissioner Delhi Goods And Service Tax And Others (Delhi High Court)

Delhi High Court has set aside demand orders issued by the Goods and Service Tax authorities against M/s Neelgiri Machinery, citing issues with the service of the preceding show cause notices. The court found that placing notices under a less visible tab on the GST portal could deny taxpayers a proper opportunity to respond.M/s Neelgiri Machinery had filed petitions challenging show cause notices and subsequent demand orders for the assessment years 2017-18 and 2018-19, arguing that these were never effectively served. The company contended that although the notices were uploaded on the GST portal, they were located under the “Additional Notices and Orders” category, making them difficult to find and potentially overlooked by the taxpayer.During the court proceedings, the tax department submitted a status report acknowledging that the GST portal functions differently for taxpayers and the department, and that information on the department’s side did not clearly indicate how notices appeared to the taxpayer. The department’s counsel conceded that the manner in which notices were displayed could lead to them being missed. The petitioner provided screenshots from the portal to support their claim that the notices were only visible under the “Additional Notices and Orders” tab.Recognizing the lack of clarity regarding notice delivery and aiming to ensure taxpayers receive a fair hearing, the High Court followed its previous rulings on similar matters. The court specifically referred to and applied the principles from Satish Chand Mittal vs. Sales Tax Officer SGST (W.P.(C) 12589/2024) and Anant Wire Industries vs. Sales Tax Officers Class II/Avato (W.P.(C) 17867/2024), which had remanded cases under similar circumstances. These earlier decisions, in turn, had been guided by judgments such as M/s ACE Cardiopathy Solutions Private Ltd. v. Union of India & Ors. (Neutral Citation No. 2024:DHC:4108-DB) and Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52 (Neutral Citation No.2024:DHC:5108-DB), which addressed the issue of notices being placed in less accessible sections of the portal.In line with these precedents, the Delhi High Court set aside the impugned demand orders dated April 23, 2024, and December 5, 2023. The court directed that the petitioner be granted a fresh opportunity to file replies to the show cause notices within thirty days. Furthermore, the court mandated that future hearing notices should not only be uploaded on the portal but also be sent via email to the petitioner to ensure proper communication. The tax authorities were directed to adjudicate the show cause notices after considering the petitioner’s submissions and providing a personal hearing.The petitions were disposed of based on these terms, with pending applications also closed. The ruling underscores the judiciary’s emphasis on proper procedural compliance by tax authorities, particularly in the digital environment, to uphold taxpayers’ rights to notice and a fair hearing.