Rajasthan High Court Defreezes Accounts As GST SCN Only Uploaded On Portal, Never Served

The Rajasthan High Court has directed de-freezing of the bank accounts of business entities and their proprietors from Sawai Madhopur after noting their submission that the SCN concerning their GST liability was only uploaded on the portal without being served through any other prescribed mode.

Granting interim relief, a division bench of Justice Mahendra Kumar Goyal and Justice Bhuwan Goyal said it would be just and proper to allow operation of the accounts, subject to the deposit of 10% of the total recovery amount, if not already deposited.

The petitions have been filed by Rakesh Kumar Jain and Choudhary Brother, along with their proprietors, against officials of the State tax department and the Union of India.

A show cause notice was issued to the petitioner under the CGST/RGST Act, 2017, which was uploaded on the GST portal, alleging liability of GST on royalty and DMFT liability. Subsequently, an ex-parte order was passed against the petitioner raising demand. This order was also only uploaded on the GST Portal.

Further, the authorities issued a letter initiating recovery proceedings against the petitioner, which was followed by another letter in which the petitioner was declared a defaulter, and his bank account was attached without giving any valid prior notice. Hence, the petitions were filed.

Counsel for the petitioners submitted that the respondents had merely uploaded notices on the portal and had not served them through registered e-mail, SMS or registered post. It was argued that mere uploading of notices on the portal does not constitute valid service under law.

Reliance was placed on a coordinate bench ruling in Lakshya Bricks and Another v. State of Rajasthan and Another (2025), where the court had held that mere uploading of notice on the portal does not constitute sufficient service and had remanded the matter for a fresh decision after granting an opportunity of hearing.

Taking note of the said decision, the bench granted two weeks' time to the respondents to file their reply. In the meantime, the court deemed it just and proper to direct de-freezing of the bank accounts, subject to a deposit of 10% of the total recovery amount, if not already deposited.

For Petitioners: Advocates Priyansha Gupta for Ashwani Kumar Chobisa

For Respondents: Anima Chaturvedi for ASG Bharat Vyas; AAG Mahi Yadav, with Rohan Mittal; Ayush Jain; Kamal Parswal with Vaibhav Pareek