Calcutta High Court Quashes GST Order, Says Notices Uploaded In 'Additional Notices' Tab Not Valid Service

The Calcutta High Court has set aside an ex parte GST adjudication order after holding that the taxpayer was denied a fair opportunity to respond to the show cause notice due to improper service of notices on the GST portal.

It observed that the show cause notice, reminder, and adjudication order were uploaded only in the "Additional Notices and Orders" tab of the GST portal and not in the "Normal" tab.

Justice Hiranmay Bhattacharyya held that such uploading does not amount to valid communication under the GST law.

The case arose from an adjudication order dated 12 April 2024 passed under Section 73 of the West Bengal Goods and Services Tax (WBGST) Act, 2017, relating to alleged discrepancies in the petitioner's GST returns for the period 1 April 2018 to 31 March 2019.

The petitioners contended that they were never effectively informed of the proceedings since the notices were uploaded only under the "Additional Notices and Orders" tab.

They further pointed out that neither the show cause notice nor the reminder mentioned the date, time, or venue of the personal hearing, and the assessment was ultimately completed ex parte.

The State argued that uploading the documents on the GST portal amounted to sufficient compliance with the statutory requirements and that the petitioners could not claim ignorance of the proceedings.

The bench observed that the GST Department issued a show cause notice alleging discrepancies in the petitioner's GST returns and asked it to explain why the ITC should not be reversed. Although the notice fixed the last date to file a reply, it did not mention the date, time, or venue of the personal hearing, and the reminder notice also omitted these details.

Rejecting the State's contention, the High Court relied upon the Division Bench judgment in Ram Kumar Singhal v. State of West Bengal, which held that uploading notices and orders only in the "Additional Notices and Orders" tab cannot be treated as effective communication under the GST law.

The Court further observed that Section 73(9) of the WBGST Act mandates that the proper officer must consider the taxpayer's representation before determining tax liability. Since the petitioners were denied an effective opportunity to file a reply or participate in a personal hearing, the adjudication order was held to be in violation of the principles of natural justice.

"..there was no effective communication of the show cause notice, the reminder letter and the order of adjudication and the petitioners were also deprived of the opportunity to give reply to the show cause notice", the court noted.

Accordingly, the Court quashed the adjudication order and granted the petitioners 14 working days to file a reply to the show cause notice.

The court directed the adjudicating authority to fix a fresh date of hearing and pass a reasoned order after considering the petitioners' reply.

It clarified that it had interfered only on the ground of violation of natural justice and that all issues on merits remain open for fresh adjudication.

For the Petitioners: Himangshu Kumar Ray, Subhasis Podder, Kanchan Singha, Abhilash Mittal, Advocates

For the State: Jagriti Mishra, Ld. AAAG, Mrinmayee Das