GST Order u/s 73 Passed Without Service of Notice: Allahabad HC directs to Treat Order as Notice and furnish documents [Read Order]

In a recent ruling, the Allahabad High Court has directed the petitioner to treat the GST (Goods and Services Tax) order issued under Section 73 of the GST Act as notice as the department failed to service show cause notice before passing the impugned order.

The petitioner is a proprietorship concern engaged in the trading of unserviceable store goods, invoked the extraordinary jurisdiction of the High Court under Article 226 of the Constitution to challenge the appellate order dated 11.07.2024 passed by the GST department.

The central grievance raised by the petitioner was that the original assessment order dated 30.12.2023 was passed without any service of notice neither physical nor electronic thereby depriving the petitioner of an opportunity to respond and present its case.

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It was contended by the petitioner’s counsel that the notice in Form GST DRC-01A, which initiates the process of determination of tax liability under Section 73, was never made visible under the ‘View Additional Notices and Orders’ tab on the GST portal.

The petitioner became aware of the assessment order only in May 2024, upon checking the dashboard. Consequently, a statutory appeal was promptly filed but was dismissed solely on the ground of delay. This, according to the petitioner, amounted to denial of the right to appeal and left it remediless.

The bench observed that the petitioner’s case raised two substantive issues: first, the absence of any valid service of notice deprived the petitioner of an opportunity to contest the tax liability; and second, the rejection of the appeal on grounds of limitation when the delay itself was due to lack of knowledge of the proceedings resulted in manifest injustice.

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Justice Ajit Kumar referred to earlier decisions of the Court, notably Ola Fleet Technologies Pvt. Ltd. v. State of U.P. (Writ Tax No. 855 of 2024), where similar issues regarding non-visibility of notices on the GST portal had been adjudicated in favour of the taxpayers. That judgment held that where the taxpayer was not afforded an opportunity to submit a reply due to technical lapses on the portal, the assessment could not be sustained.

Referring to the Ola feet case, the bench observed that “The division bench was of the view that party under liability of tax in an ex parte order needs at-least an opportunity to put up his defense by submitting papers which may have led assessing officer to uphold the claim for exemption from tax liability. The division bench accordingly, instead of keeping the matter pending disposed off the same with a direction that impugned order may be taken as notice to enable the petitioner to submit his reply and thereafter assessing officer may have to pass a fresh order.”

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The court accordingly directed that the assessment order dated 30.12.2023 shall be treated as a notice under Section 73 of the GST Act, thereby giving the petitioner an opportunity to file objections and place relevant documents within a period of eight weeks. The assessing authority has been mandated to consider the submissions and pass a fresh order after affording a personal hearing within four weeks thereafter.

To Read the full text of the Order CLICK HERE

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