Delhi HC Sets Aside GST Demand Order, Says Reminder Cannot Validate Unserved SCN

The Delhi High Court has recently set aside a GST demand order after finding that the show cause notice (SCN) was not effectively served on the assessee, holding that a reminder issued in respect of such an SCN cannot be treated as a valid communication.

A bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul thus set aside a GST demand order after finding that the SCN had not been properly communicated to the petitioner.

Petitioner challenged the demand order issued under Section 73 of the Delhi Goods and Services Tax Act, 2017, contending that the SCN was uploaded on the GST portal under the “Additional Notices” tab and was not brought to its knowledge. As a result, no reply could be filed, and the order came to be passed without an opportunity of hearing.

The revenue authorities argued that a reminder had subsequently been issued after changes were made to the GST portal, and therefore, the petitioner had sufficient notice of the proceedings.

Rejecting this contention, the Court observed,

“reminder pertained to the SCN uploaded prior to 16th January, 2024 in the same 'Additional Notices Tab‟ in which the SCN itself had been uploaded, a tab, in which the SCN was not visible to the petitioner. In such circumstances, where the SCN itself was never effectively served upon the petitioner, any subsequent communication styled as a reminder in respect thereof cannot, in law, be treated as a valid or effective reminder to the said SCN.”

The court noted that after 16th January, 2024, certain changes were introduced on the GST portal and the 'Additional Notices Tab‟ was made visible. However, in the present case, the SCN had been issued prior to the said date.

“In such circumstances, and considering that the petitioner was not afforded a proper opportunity of hearing and had not filed any reply to the SCN, this Court is of the view that the matter deserves to be remanded to the concerned Adjudicating Authority,” the Court said.

As such, it set aside the impugned demand order and granted the petitioner time to file a reply to the SCN.

For Petitioner: Advocates Pranjal Shukla and Srikant

For Respondent: Advocates Sumit K. Batra and Priyanka Jindal  for GNCTD.