Delhi HC sets aside GST order passed without proper service of the show cause notice

The petitioner, Anil Kumar, proprietor of N.S. Super Mart challenged a show cause notice dated 15.12.2023 and the later  order-in-original dated 03.04.2024 passed under the Delhi GST law. The show cause notice proposed a tax demand of Rs. 10.91 lakh on account of alleged excess Input Tax Credit due to GSTR-2A and GSTR-3B mismatch, non-reversal of ITC relating to exempt supplies, and ITC claimed from dealers whose registrations were cancelled.

The notice, along with reminders, was uploaded only under the “Additional Notices and Orders” tab on the GST portal. According to the petitioner, this mode of uploading did not come to his knowledge, resulting in complete absence of awareness of the proceedings. Thus, no reply was filed and the order was ultimately passed ex parte on the ground of non-prosecution, without granting any personal hearing.

Main Issue: Whether a show cause notice uploaded only under the “Additional Notices” tab on the GST portal, without effective service or knowledge to the assessee, can form the basis for passing an ex parte adjudication order raising tax demand.

HC Held: The High Court held that mere uploading of a show cause notice and reminders under the “Additional Notices” tab, when the tab itself was not operational or accessible to the petitioner, did not amount to proper or effective service. Relying on its earlier Division Bench decision in Neelgiri Machinery v. Commissioner, Delhi GST and Etemad Cargo, the Court found that the petitioner was denied a meaningful opportunity of hearing.

The impugned order dated 03.04.2024 was accordingly quashed. The matter was remanded to the tax authority with directions to permit the petitioner to file a reply within four weeks, grant a personal hearing on a specified date, and thereafter pass a reasoned order within three months.

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