GST Demand Order Served Only On Portal: Delhi High Court Allows Appeal To Be Filed Without Limitation Objection

The Division Bench of Justices Anil Kshetarpal and Shail Jain held that while the assessee could not seek restoration of the proceedings to the stage of issuance of the show cause notice since it had filed a reply and participated in the adjudication proceedings, it would be entitled to file a statutory appeal against the demand order within four weeks without any objection on the ground of limitation.

The court was dealing with two writ petitions challenging SCNs and demand orders issued under Section 73 of the Central Goods and Services Tax Act, 2017 and Delhi Goods and Services Tax Act, 2017 for the financial year 2020-21.

At the outset, the Court noted that the factual circumstances of the two petitioners differed regarding their response to the respective show cause notices.

Petitioners sought disposal of the petitions in terms of the Punjab and Haryana High Court's decision in Luxmi Traders v. Union Territory of Chandigarh.

In Luxmi Traders (supra) it was held that merely uploading a SCN or adjudication order on the GST common portal does not amount to valid service under the CGST Act unless its receipt is acknowledged or the assessee files a reply.

In the case at hand, the first Petitioner had filed a reply to the show cause notice and had participated in the adjudication proceedings. The Court therefore held that its case could not be restored to the stage of issuance of the show cause notice.

However, since the demand order had been served only by uploading it on the Common Portal, the Court directed that the Petitioner could file a statutory appeal within four weeks from the date of its order.

“If such an appeal is filed within the aforesaid period, upon compliance with the other statutory requirements, it shall be entertained without raising any objection regarding limitation and shall be decided on its merits,” it ordered.

So far as the second Petitioner is concerned, the Court found that the show cause notice itself had been served only through the Common Portal, no reply had been filed, and the demand order was consequently passed ex-parte.

Holding that the case was squarely covered by Luxmi Traders, the Court set aside the demand order and restored the proceedings to the stage of issuance of the show cause notice.

For Petitioner: Advocates Chinmaya Seth, A.K. Seth, Palak Mathur, Karanveer singh

For Respondents: Advocates Sumit K. Batra and Priyanka Jindal for GNCTD, Devvrat Yadav (SPC), Kartik Sharma (GP) for UOI