GST - Deemed service of order and right to appeal an analysis in view of recent judgment.

[DEV KUMAR KOTHARI]

Reference of related provisions and judgment considered:

Section 169 of CGST Act, 2017 and corresponding provisions in related GST enactments.

A.S. JEWELLERS, VERSUS STATE TAX OFFICER PALLAKAD, STATE OF KERALA, GOVERNMENT OF INDIA, DEPARTMENT OF REVENUE, CENTRAL BOARD OF EXCISE AND CUSTOMS, NEW DELHI [2022 (1) TMI 49 - KERALA HIGH COURT]

Section 169 of CGST Act, 2017 analyzed in tabular manner:

From provision with catch words and highlights  added for easy understanding  and analysis	Remarks and observations in addition to highlights provided in left column
CENTRAL GOODS AND SERVICES TAX ACT, 2017
Service of notice in certain circumstances.
169. (1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:-	Scope of documents covered is wide and items covered are illustrative and inclusive and requirement to serve is mandatory
(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or	Scope and  manner of giving or tendering is wide and persons to whom it can be given or tendered is also wide. In view of this, it is imperative that the person receiving must acknowledge receipt.
(b) by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or	With acknowledgement due, means that there should be acknowledgement by person receiving .
(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or	In case for any reason email is bounced and not delivered, then it should not be considered as sent.
(d) by making it available on the common portal; or	To keep track of portal is difficult for small and medium organizations. Therefore, in addition to posting on portal, other method of communication should also be applied. It is desirable that certain period should be excluded from the date of webhosting of document in portal. This is becaseu it is not possible that everyone is  in a position to track portal daily and there are frequent technical glitches in portal.
(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or	How far news paper publication is relevant and effective is not known, in present days of Covid restrictions and even otherwise.  However , it serves purpose of compliance of formality.
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.
(2) Every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub-section (1).
(3) When such decision, order, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved.

On reading of the above provisions we find that variety of methods of communication to serve documents are provided and there are deemed service of documents. However, when a documents is tendered or delivered to any specified person then it must be acknowledged by the person receiving it. Because with acknowledgment due is not a mere formality.

However, in present days of possibility of easy tracking of documents, if a delivery report is found on website of India Post or Courier, then that report of delivery can also be considered as evidence of delivery.

Service of document is mandatory:

Service of documents issued by GST department is mandatory. Unless a document is not served, it cannot be acted upon by the addressee. 

Mistakes by India Post and Couriers:

Many times we find that wrong delivery is made by India Post and Couriers. Experience shows that Couriers also fails to locate addressee and just return documents with remarks like not found. Sometimes new delivery boys or in new area, delivery fails due to ignorance and less efforts to find out addressee. Author recalls he faced many such documents returned by courier even though addressee was a popular person and it was not difficult to find out even by new delivery boys, but there was complete lack, of efforts and many documents (invitation cards) were returned.

Although proportion of such failure may be miniscule, however, an unfortunate person can be hit even by such miniscule occurrences.

Therefore, deeming provisions should not be applied in a mechanical manner, unless the addressee has received document, assumption of  delivery is not proper. In any case, authorities should provide another copy if the addressee request for the same for the reason that original one was not received by him.

 Case of A.S.Jewellers (supra.)

In this case the taxpayer contended that he did not receive impugned order of adjudication. He became aware of existence of order and demand only when bank guarantee was invoked by GST department. Assessee had to approach High Court for a direction including for certified copy of adjudication order, which was deemed to be served as per deeming provisions.

From judgment and order:      

Quoted with highlights added by author:

 “7. Section 169 (1)(b) provides for service by registered post with acknowledgement due, while sub-clause (2) creates a deeming fiction as per which every decision or order shall be deemed to have been served on the date on which it is tendered as provided in sub-section (1). When a statute enacts that something shall be deemed to have been done, the Court has a duty to give effect to that fiction.

8. As per the statutory prescription and going by the averments in the counter affidavit as well as the documents produced, it is evident that petitioner can be deemed to have been tendered with the order under Section 129(3) on 03.02.2020. The fiction that is created does not leave any room for doubt and since the tendering of notice is by registered post with acknowledgement due, there is no scope for even assuming that the order was not served on the petitioner. In this context, this Court notices the pleading of the petitioner that he had received the notice for hearing scheduled on 24.01.2020. The copy of dispatch register showing that the order was dispatched on 28.01.2020 and the copy of acknowledgement card produced as Ext.R1(c), fortifies the above conclusion. Hence I find that the order under Section 129(3) of the Act was served on the petitioner on 03.02.2020.

9. However, having regard to the contention that petitioner had not received the order or that he may have misplaced the order due to which petitioner ought to be given a certified copy to enable him to pursue appropriate statutory remedy is a contention which merits consideration. Petitioner contends that he is entitled to claim the benefit of the condonation of period of limitation on account of the order of the Supreme Court in  IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (3) TMI 497 - SC ORDER] and the subsequent order IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (11) TMI 387 - SC ORDER] as per which, the period from 15.03.2021 till 02.10.2021 have been directed to be condoned by the Supreme Court in all applications under all statutes. Since the petitioner’s right to pursue an appeal cannot be curtailed solely on account of non-receipt of an order or loss of an order, if law otherwise permits him to pursue the appeal, then certainly it is incumbent upon the first respondent to issue a certified copy to the petitioner.

Accordingly I direct the first respondent to issue a certified copy of the order No.IX/CR-69/19/6207/19 dated 25.01.2020 to the petitioner in accordance with law forthwith. Needless to say, on receipt of certified copy, petitioner will be entitled to pursue its statutory remedies in accordance with law. It is also clarified that since this Court has exercised the discretion to direct certified copy to be served to the petitioner, invocation of Ext.P6 bank guarantee through Ext.P8 letter shall be kept in abeyance and the bank guarantee be kept alive for a period of 60 days from today to enable the petitioner to pursue the statutory remedies, if available.

The writ petition is disposed of as above.”

Un quote:

In this case authorities must have considered practical aspects and provided a copy of order to the taxpayer so that he could prefer appeal without further delay. Instead, it seems that by denying copy of order GST department forced tax payer to approach High Court for obtaining a copy of order so that taxpayer could prefer appeal.  It is high time that tax authorities must also act in a cooperative and practical manner to facilitate tax payers to seek remedies available without loss of time and without need to approach High Courts.

Tax departments must also act as a facilitator and service provider at least to some extent that tax payers can feel some regards and consideration of position of taxpayer.

In this case authorities must have considered practical aspects and provided a copy of order to the taxpayer so that he could prefer appeal without further delay. Instead, it seems that by denying copy of order GST department forced tax payer to approach High Court for obtaining a copy of order so that taxpayer could prefer appeal.  It is high time that tax authorities must also act in a cooperative and practical manner to facilitate tax payers to seek remedies available without loss of time and without need to approach High Courts.

Tax departments must also act as a facilitator and service provider at least to some extent that tax payers can feel some regards and consideration of position of taxpayer.

Discussions to this article

[Ganeshan Kalyani]

Sir, nice write up. Thanks.