HC Quashes GST Order Passed Without Proper Service of Show Cause Notice

The petitioner, a sole proprietor carrying on retail business under the name N.S. Super Mart, challenged a GST show cause notice dated 15.12.2023 and the consequent order-in-original dated 03.04.2024, by which a tax demand of Rs. 10.91 lakh was raised. The demand was based on alleged excess availment of Input Tax Credit due to GSTR-2A/3B mismatch, non-reversal of ITC on exempt supplies, and ITC claimed from suppliers whose registrations were cancelled.

The petitioner said that the show cause notice and later reminders were never served in any meaningful manner and were merely uploaded on the GST portal under the “Additional Notices and Orders” tab, which remained unnoticed. Thus, no reply was filed, and the proceedings culminated in an ex parte order.

Main Issue: Whether GST adjudication proceedings are sustainable when the show cause notice is uploaded only under the “Additional Notices” tab on the GST portal, thereby denying the assessee an effective opportunity of hearing.

HC’s Judgment: The Hon’ble High Court held that the issue was squarely covered by its earlier judgment in Neelgiri Machinery, as followed in Etemad Cargo. The Court accepted the petitioner’s contention that uploading notices only under the “Additional Notices” tab does not constitute valid or effective service, particularly when it results in the assessee being unaware of the proceedings.

The Court found that the petitioner had been denied a reasonable opportunity to respond, and thereafter, the principles of natural justice were violated. The order-in-original was therefore quashed. The matter was remanded to the adjudicating authority with liberty to the petitioner to file a reply within four weeks. The authority was directed to grant a personal hearing and pass a reasoned order in accordance with the law within three months.

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