Court rules that service of notice solely through GST portal post-registration cancellation is invalid; emphasizes the necessity of personal hearings under GST Act.
In a significant judgment, the Uttarakhand High Court quashed the adjudication and appellate orders against M/s Vandana Distributors, citing improper service of notice under the Goods and Services Tax (GST) Act, 2017. The division bench of Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay ruled that the service of a show-cause notice solely via the GST portal is not valid when the firm's registration has been cancelled.
The case revolved around the cancellation of M/s Vandana Distributor's registration on September 12, 2023, effective from July 31, 2023. Post-cancellation, a show-cause notice was issued on December 23, 2023, but was only made available on the GST portal. The petitioner argued that this method was ineffective, as they were no longer required to monitor the portal after their registration was annulled.
The court upheld the petitioner's contention, referencing similar cases and judgments, including those by the Allahabad High Court and the Supreme Court, which emphasize the principles of natural justice and the right to a fair hearing. The judgment pointed out that Section 169 of the CGST Act prescribes multiple methods for serving notices, including direct delivery, registered post, email, and publication, and that relying solely on portal communication is insufficient.
Furthermore, the court underscored the mandatory requirement for a personal hearing under Section 75(4) of the CGST Act, aligning with the principles of natural justice. The court stated that fiscal adjudications must strictly adhere to these principles to ensure fairness and transparency.
The ruling grants the revenue authorities the liberty to proceed with the case from the show-cause notice stage, provided they ensure valid service of notice and offer a personal hearing if requested by the petitioner.
This judgment reinforces the importance of due process and compliance with statutory mandates in fiscal matters, ensuring that taxpayers are accorded their rights to be heard and adequately informed.
Bottom line:-
GST Act - Service of notice solely via GST portal, when the registration of the firm has already been cancelled, is not valid service under Section 169 of the CGST Act. The Department is obligated to ensure effective service of notice through other prescribed methods. Further, an opportunity of personal hearing under Section 75(4) of the CGST Act is mandatory in fiscal adjudications to comply with principles of natural justice.
Statutory provision(s):
Goods and Services Tax Act, 2017 Sections 73(9), 75(4), 169
