The Madras High Court has warned the GST ( Goods and Services Tax ) department against the mechanical issuance of ex-parte orders without ensuring effective service of notice upon taxpayers.
The Court observed that merely uploading notices on the GST common portal, without exploring other prescribed modes of service under Section 169 of the CGST Act, constitutes nothing more than fulfilling empty formalities, which ultimately serve no useful purpose and only contribute to a multiplicity of litigations.
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A writ petition filed by a taxpayer, S.P. Forms, challenging an assessment order, passed without being granted an opportunity for a personal hearing.
The petitioner argued that all communications and show cause notices were only uploaded on the GST portal, and in negligence of the accountant, they were not made aware of them. Hence, they could not respond, and as a result, an ex parte order was passed.
The petitioner expressed willingness to deposit 25% of the disputed tax amount, seeking a remand of the matter.
However, the government advocate, while defending the service through the GST portal, fairly admitted that no opportunity for a personal hearing was provided and agreed that the matter could be remitted for fresh consideration.
Justice Krishnan Ramasamy, after hearing both sides and perusing the record, noted that although portal upload is a legally recognized mode of service, it does not automatically qualify as effective service when there is no response from the taxpayer.
“No doubt, sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only fulfilling the empty formalities”, stated the bench.
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It also added that “Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well.”
The court Considering the petitioner’s readiness to pay part of the tax and to contest the matter on merits, the Court set aside the impugned order and remanded the case back to the department on condition to pay 25% of disputed amount. The department was instructed to issue a 14-day notice for personal hearing, and pass orders after granting an opportunity of hearing, in accordance with law.
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