The Kerala High Court, in a recent ruling distinguished between the terms ‘Non-Service of Notice’ and ‘Lack of Knowledge of Service of Notice’ under Goods and Service Tax (GST).
The petitioner/assessee, Ramanattu Motor Corp, is a partnership entity. Following a show-cause notice under section 73(1) of the GST Act, an order was issued for the fiscal year 2018–19, imposing a significant responsibility. A notice indicating some irregularities in the submitted return is said to have preceded the hearing that led to the aforementioned order.
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The petitioner said that it was not informed of the proceedings until the notification of the recovery proceeding was posted on the web and that neither of the two notices previously mentioned nor the order of determination had been served upon it. Since the show cause notice was uploaded under the “Additional Notices and Orders” area rather than the “Notices and Orders” tab on the portal, it was argued that the petitioner learned about it significantly later.
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The petitioner argued that the impugned order of decision under section 73 of the Act was issued in breach of the principles of natural justice since the petitioner had no reason to check the tab for “Additional Notices and Orders” when there was no previous notification.
The government argued that the GST common site serves as a platform for all activities conducted under the GST Act and was notified under section 146 of the GST Act to facilitate registration, tax payment, return filing, etc. Additionally, it is argued that when a taxpayer visits the “User Services” section of the portal, the drop-down menus for “Notices and Orders” and “Additional Notices and Orders” are prominently displayed. Additionally, when registering on the common portal, each dealer is given a comprehensive tutorial that explains how the portal functions, including the functions of the “Notices and Orders” and “Additional Notices and Orders” tabs.
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The department contended that the drop-down page of ‘Notices and Orders’ pertains to administrative matters like registration, while, ‘Additional Notices and Orders’ pertain to matters of adjudication and hence the design of serving notices relating to adjudication assessment can only be uploaded in the ‘Additional Notices and Orders’ tab.
The single bench of Justice Bechu Kurian Thomas has observed that while ‘non-service of notice’ is a case of certain violation of the principles of natural justice, ‘not noticing or lack of knowledge of service of notice’ cannot have such a legal effect in every situation.
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The bench stated that lack of knowledge of service of notice can amount to a violation of principles of natural justice only in certain limited circumstances. When lack of knowledge is attributable to the default of the sender of the notice, then ‘not noticing or lack of knowledge of service of notice’ can amount to a negation of the principles of natural justice.
The notice that came before the order of decision under section 73 of the GST Act was placed on the petitioner’s portal under the “Additional Notices and Orders” tab and another tab labeled “Notices and Orders,” the bench observed. Everyone will go to the “Notices and Orders” tab to see if any notices have been sent out.
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A person cannot check the tab for “Additional Notices and Orders” if there are no notices uploaded in the “Notices and Orders” tab, according to the bench, unless the page itself contains appropriate instructions that clearly outline how to use the portal.
It cannot be assumed that taxpayers have been effectively informed that the first notice regarding determination under section 73 or 74 of the GST Act will be uploaded only in the tab meant for “Additional Notices and Orders” if there are no specific notes or instructions provided on the same page meant for “Notices and Orders” or “Additional Notices and Orders.”
The court observed that the petitioner was not given enough time to challenge the issue, nor was there any appropriate notice served.
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