2024 (12) TMI 1400 - HC - GST

Service of SCN - Challenge to impugned order on the ground that the said order has been passed pursuant to the Show Cause Notice which was not received by the Petitioner - Violation of principles of natural justice - HELD THAT - In the present case, the affidavit dated 19th December, 2024 has been filed to the effect that the Show Cause Notice and the order dated 21st February, 2024 were not received on the registered email ID or physically - After having perused the said affidavit, this Court is of the view that following the earlier decisions passed by this Court, the Petitioner herein also deserves to be given an opportunity to reply to the Show Cause Notice. The impugned order dated 21st February, 2024 is set aside - the matter is remanded back to the concerned Department for fresh consideration after providing an opportunity of hearing to the Petitioner - petition disposed off by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the service of a Show Cause Notice (SCN) by uploading it under the category of 'Additional Notices and Orders' on the Goods and Services Tax (GST) portal constitutes sufficient service under Section 169 of the Central Goods and Services Tax Act, 2017 (CGST Act).
Whether the Petitioner was denied the opportunity to respond to the SCN due to non-receipt of the notice on the registered email ID or physically.
What are the appropriate remedies if the service of the SCN is found to be insufficient?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Sufficiency of Service of SCN

Relevant Legal Framework and Precedents: Section 169 of the CGST Act outlines the modes of service of notice, which include electronic communication. The Court referenced previous judgments, including Kamla Vohra v. Sales Tax Officer Class II and ACE Cardiopathy Solutions (P.) Ltd. v. Union of India, which held that uploading notices under 'Additional Notices' is not sufficient service.
Court's Interpretation and Reasoning: The Court found that the practice of uploading notices under 'Additional Notices' does not meet the service requirements as outlined in Section 169. It emphasized the need for notices to be easily accessible and properly categorized.
Key Evidence and Findings: The affidavit filed by the Petitioner stated that the SCN was not received on the registered email or physically. The Court accepted this affidavit as evidence of non-receipt.
Application of Law to Facts: Given the non-receipt of the SCN and the precedent set by previous cases, the Court concluded that the service was insufficient.
Treatment of Competing Arguments: The Respondents argued that uploading on the portal was sufficient, but the Court rejected this, citing the need for proper categorization and accessibility of notices.
Conclusions: The Court concluded that the service of the SCN was insufficient and warranted setting aside the impugned order.

Issue 2: Denial of Opportunity to Respond

Relevant Legal Framework and Precedents: The principles of natural justice require that parties be given a fair opportunity to respond to notices. The Court referred to the precedent where similar situations led to setting aside orders due to non-receipt of notices.
Court's Interpretation and Reasoning: The Court reasoned that the Petitioner was denied a fair opportunity to respond due to the improper service of the SCN.
Key Evidence and Findings: The affidavit confirming non-receipt of the SCN was pivotal in establishing the denial of opportunity.
Application of Law to Facts: Applying the principles of natural justice, the Court found that the Petitioner should be given an opportunity to respond to the SCN.
Treatment of Competing Arguments: The Respondents' assertion of sufficient service was outweighed by the Petitioner's evidence and the need for fair process.
Conclusions: The Court concluded that the Petitioner was unjustly denied the opportunity to respond, necessitating a remand for fresh consideration.

Issue 3: Appropriate Remedies

Relevant Legal Framework and Precedents: The Court followed the precedent of setting aside orders when notices were improperly served, as seen in previous cases.
Court's Interpretation and Reasoning: The Court determined that setting aside the impugned order and remanding the matter for fresh adjudication was the appropriate remedy.
Key Evidence and Findings: The affidavit and the Court's previous rulings on similar issues guided the remedy.
Application of Law to Facts: The Court applied the law by setting aside the order and directing a fresh hearing, allowing the Petitioner to respond to the SCN.
Treatment of Competing Arguments: The Court balanced the need for proper service and the opportunity for the Petitioner to be heard against the Respondents' procedural arguments.
Conclusions: The Court concluded that the matter should be remanded to the concerned authority for fresh consideration.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The impugned SCN was uploaded on the portal in the category of 'Additional Notices' which the petitioner claims was not easily accessible. It is contended that the show cause notices were required to be placed under the heading of 'Notices' but the same was not done."
Core Principles Established: The sufficiency of service requires proper categorization and accessibility of notices. Non-receipt of notices due to improper service violates principles of natural justice.
Final Determinations on Each Issue: The impugned order dated 21st February, 2024, is set aside. The matter is remanded for fresh consideration, with the Petitioner given an opportunity to respond to the SCN.

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