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2025 (3) TMI 1308 - HC - GSTPrinciples of natural justice - Service of SCN and Demand Orders - case of the Petitioner is that although the SCNs were uploaded on the portal they were placed under the category of Additional Notices and Orders rendering them not directly visible - HELD THAT - The Department concedes that the portal works differently from the Department s side and the tax payer s side. Insofar as the Petitioner is concerned the Department was not being able to view them on the Notices tab. The Petitioner in support of its case has placed on record the print out from the portal which shows that the same was viewable only on Additional notice and orders Tab and hence may have been missed by the Petitioner. The impugned demand orders dated 23rd April 2024 and 5th December 2023 are accordingly set aside. In response to show cause notices dated 04th December 2023 and 23th September 2023 the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law. Petition disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Service of Show Cause Notices and Demand Orders Relevant legal framework and precedents: The legal framework requires that SCNs and demand orders be adequately served to ensure the taxpayer is aware and has the opportunity to respond. The Court referenced prior decisions, including Satish Chand Mittal vs. Sales Tax Officer and Anant Wire Industries vs. Sales Tax Officers, which addressed similar issues of notice service and taxpayer opportunity to be heard. Court's interpretation and reasoning: The Court noted the Department's concession that the GST portal functions differently for the Department and taxpayers, leading to potential visibility issues for notices. The Court emphasized the necessity of ensuring taxpayers are aware of notices to uphold principles of natural justice. Key evidence and findings: The status report from the Department acknowledged the discrepancy in how notices are displayed on the portal. The Petitioner provided evidence showing the SCNs were only visible under "Additional Notices and Orders," which may have led to them being overlooked. Application of law to facts: The Court applied the principles from prior cases, determining that the Petitioner had not been properly served due to the portal's configuration, which hindered their ability to respond. Treatment of competing arguments: The Department argued that the notices were uploaded correctly, but conceded the portal's functionality issue. The Court found this acknowledgment significant in deciding to set aside the demand orders. Conclusions: The Court concluded that the Petitioner was not given a fair opportunity to respond to the SCNs due to service issues, warranting the setting aside of the demand orders and remanding the case for proper adjudication. 2. Fair Opportunity to Respond and Participate in Adjudication Relevant legal framework and precedents: The principles of natural justice require that parties be given a fair opportunity to present their case. The Court referenced similar cases where matters were remanded to ensure fair hearing opportunities. Court's interpretation and reasoning: The Court emphasized the need for clarity and accessibility of notices to ensure taxpayers can respond adequately. It highlighted the importance of procedural fairness in tax adjudication. Key evidence and findings: The Court noted the Department's admission of the portal's differing functionality and the Petitioner's evidence of the notices' placement under a less visible tab. Application of law to facts: The Court applied the principles of natural justice, determining that the Petitioner was not afforded a fair opportunity to respond due to the visibility issues on the portal. Treatment of competing arguments: The Court considered the Department's procedural adherence claims but found the portal's configuration issues significant enough to impact fairness. Conclusions: The Court concluded that the Petitioner should be granted another opportunity to respond to the SCNs and participate in the adjudication process, leading to the setting aside of the demand orders. SIGNIFICANT HOLDINGS Core principles established: The judgment reinforces the principle that adequate service of notices is crucial for ensuring taxpayers' rights to respond and participate in adjudication, in line with natural justice. Final determinations on each issue: The Court set aside the impugned demand orders dated 23rd April, 2024, and 5th December, 2023, due to improper service of SCNs. It directed the Petitioner to file replies within thirty days and mandated that hearing notices be emailed to the Petitioner in addition to being uploaded on the portal. The adjudication process was to be conducted afresh, ensuring the Petitioner had a fair opportunity to be heard.
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