HC Says: GST Show Cause Notices Must Be Delivered to Be Served

The assessee contested an assessment order dated 16.08.2024 for the fiscal year 2019–20 in a writ petition filed before the High Court, claiming that it violated natural justice principles. The assessee contested that the show cause notice was only posted on the GST portal on August 22, 2023, and the show cause notice was not delivered via any physical or alternative mode as per Section 169 of the GST Act mandate. Due to which the petitioner did not receive the notice and did not submit a response. The petitioner only became aware of it upon receipt of an attachment notice issued by the bank. The petitioner requested a remand for further consideration and offered to deposit 25% of the contested tax amount.

Issue Raised: Whether the GST Act’s requirement for an effective notice is met by simply uploading a notice on the GST portal without attempting any other service methods.

HC’s Decision: The Court held that while portal service is legally permissible, in order to ensure effective service, the authority must take reasonable action if no response is received, especially as per Section 169(1), by looking into alternative modes such as Registered Post (RPAD). The court held that relying only on portal uploads can result in needless litigation. The Court revoked the assessment order, ruling that the assessee had not been given a fair opportunity. It permitted a new reply and ordered the petitioner to deposit 25% of the contested tax as offered. The department was directed to adjudicate the case again with a personal hearing and to remove the bank account attachment upon proof of deposit. Therefore, the writ petition was dismissed without costs.