Court highlights breach of natural justice due to ineffective service of Show Cause Notice on GST Portal; mandates email notifications for future communications.
In a significant judgment, the Delhi High Court has set aside a GST demand order issued against M/s NHD Motors, citing procedural lapses and a breach of natural justice. The division bench comprising Justices Nitin Wasudeo Sambre and Ajay Digpaul ruled that the Show Cause Notice (SCN) was not effectively served to the petitioner, as it was uploaded on an inaccessible 'Additional Notices Tab' of the GST Portal before changes were made to enhance its visibility.
The case pertains to a demand order dated April 5, 2024, which was based on an SCN issued on December 9, 2023, for the financial year 2018-19. NHD Motors contended that they were unaware of the SCN due to its placement on the portal, thus not being able to file a response or appear for a hearing. Consequently, the order demanding Rs. 23,67,282/- was passed in their absence.
The Court, referencing similar cases like Neelgiri Machinery and Satish Chand Mittal, emphasized the importance of providing a fair opportunity to the parties involved. It directed that the matter be remanded to the Adjudicating Authority, which must allow NHD Motors to submit a reply and conduct a personal hearing before passing any fresh order.
Furthermore, the judgment mandates that future notices and communications should not be limited to being uploaded on the GST Portal but also be sent via email to ensure effective service. This directive aims to prevent similar issues of inaccessibility and ensure compliance with the principles of natural justice.
The Court has provided NHD Motors until May 8, 2026, to file their reply to the SCN. The Adjudicating Authority is required to consider the response and submissions during the personal hearing before issuing a new order.
This judgment underscores the judiciary's commitment to upholding procedural fairness and addressing technical barriers that may impede justice. It also sets a precedent for the GST Department to adopt more transparent and accessible communication methods with taxpayers.
Bottom Line:
GST Portal - Show Cause Notice (SCN) uploaded on 'Additional Notices Tab' and not effectively served upon the petitioner - Impugned demand order set aside and matter remanded to the Adjudicating Authority for fresh consideration after granting the petitioner an opportunity to file a reply and a personal hearing.
Statutory provision(s):
Delhi Goods and Services Tax Act, 2017, Section 73; Article 226 of the Constitution of India.
M/s NHD Motors v. Government of N.C.T. of Delhi, (Delhi)(DB) : Law Finder Doc id # 2887200
