High Court quashes GST Notice based on GSTR-3B and E-Way Bill comparison

Jindal Steel Limited, engaged in manufacturing iron and steel products, filed its GST annual return (GSTR-9) and reconciliation statement (GSTR-9C) for FY 2020-21. Based on a comparison of GSTR-3B returns with E-Way Bill data, the State Tax Officer generated Form GST ASMT-10 alleging discrepancies. The petitioner said the notice was never properly served and was merely uploaded under the “Additional Notices/Orders” tab on the GST portal, which remained unnoticed.

A Show Cause Notice was issued under Section 73 of the GST Act, followed by an ex parte assessment order raising a tax demand of Rs. 8.62 crore. After discovering the uploaded notices, the petitioner filed a rectification application under Section 161, pointing out apparent errors. But the rectification application was rejected.

Issue Before HC: Whether uploading GST notices and orders only under the “Additional Notices/Orders” tab constitutes valid service under Section 169 of the GST Act, and whether rejection of a rectification application under Section 161 without hearing or reasons violates principles of natural justice.

HC’s Decision: The Hon’ble High Court held that uploading notices and orders only under the “Additional Notices/Orders” tab does not amount to valid service, as such placement is neither prominent nor reasonably accessible to taxpayers. The Court found that the petitioner was effectively denied an opportunity to respond, resulting in a clear breach of natural justice.

The Court further held that rejection of the rectification application under Section 161 was arbitrary, non-speaking, and reflected non-application of mind. The Court quashed the rectification order dated 20.06.2025 and remanded the matter to the State Tax Officer. The authority was directed to grant a proper hearing, examine the records already available on the GST portal, and pass a reasoned order in accordance with law.

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