Taxpayer Wins! High Court Strikes Down GST Order Passed Without Hearing

The High Court recently ruled in favor of a petitioner contesting an April 30, 2024, GST assessment order. The complaint was based on the fact that he never received a hard copy of the show cause notice; instead, he only received a digital copy that was posted on the GST portal. The petitioner claimed he was not given a chance to respond and was not informed of the proceedings, so he went to court to have the assessment revoked and the resulting attachment of his property lifted. The court decided in favor of the petitioner after pointing out the procedural error.

Main Issue: The main problem before the Court was whether sending a show-cause notice via the GST portal without attempting other legally required forms of communication constituted adequate service, particularly in cases where the taxpayer did not reply. According to the petitioner, this strategy denied him a fair chance to make his case.

Court’s Reasoning and Decision: The Hon’ble High Court acknowledged that uploading notices on the GST portal is a valid method of service. However, it stressed that if a taxpayer does not respond, authorities must not stop at digital uploads. Instead, they should try other methods listed under Section 169 of the CGST Act, such as sending notices by registered post (RPAD), to ensure the taxpayer is truly informed and given a chance to reply. The Court observed that relying solely on portal uploads, especially when there is no response, is merely a formality and can lead to unfair ex parte orders and unnecessary legal disputes.

The Court directed the petitioner to deposit 25% of the disputed tax within two weeks of receiving the order and to file a detailed reply with supporting documents within two weeks thereafter. It further instructed the Assessing Officer to issue a 14-day notice for a personal hearing and pass a fresh order after considering the petitioner’s response. Upon proof of the tax deposit, the property attachment was to be lifted immediately. The writ petition was disposed of without costs.