Service by E-Mail is Valid, Consolidated GST SCNs Justified in ITC Fraud Cases: Supreme Court Upholds Delhi HC Order [Read Order]

The Supreme Court of India upheld the Delhi High Court ruling, which had held that service of notices through e-mail is valid under Section 169(1)(c) of the Central Goods and Services Tax Act, 2017 (CGST), and that consolidated show cause notices covering multiple financial years are permissible under Section 74 of the CGST Act.

The case arose from an order of the Central Goods and Services Tax (CGST) Department, which had issued a consolidated show cause notice and order covering multiple financial years, alleging fraudulent availment of Input Tax Credit (ITC) amounting to Rs. 81,54,990.

The Mathur Polymers (petitioner) counsel approached the High Court, arguing that the order was passed in violation of the principles of natural justice, as no personal hearing notice was received, and that a single consolidated notice for several financial years was not permissible under Section 74(10) of the CGST Act.

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Before the High Court, the petitioner’s counsel argued that the notices for personal hearing were sent to the e-mail address of the Chartered Accountant and not to the petitioner, making the service invalid. They also added that each financial year required a separate show-cause notice and order, and the consolidated notice was contrary to law.

The CGST Department’s counsel argued that the notices were properly served at the registered e-mail address mentioned on the GST portal, which was the same address provided by the proprietor, and that Section 169(1)(c) of the CGST Act treats such electronic service as valid.

The department also argued that in cases of fraudulent ITC claims, a consolidated notice covering multiple years is justified because the transactions are interconnected and spread over different periods.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that communication sent to the registered e-mail address constitutes valid service under Section 169(1)(c) of the CGST Act. The court explained that the petitioner’s registered e-mail address was the same as the one used by the department to send hearing notices.

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It further observed that the writ petition was silent on this fact and that material information had been concealed. The court also observed that under Sections 73(3), 73(4), 74(3), and 74(4) of the CGST Act, the expressions “for any period” and “for such periods” allow the department to issue consolidated show cause notices where the transactions extend across several years.

The court explained that in cases of fraudulent ITC, the investigation often spans multiple financial years, and issuing separate notices may prevent proper examination of the fraudulent pattern.

The court pointed out that the allegations of fraudulent ITC involve factual issues that cannot be adjudicated in writ proceedings. Finding no violation of natural justice or jurisdictional error, the Court dismissed the petition with costs of Rs. 50,000 payable to the CGST Department.

The Supreme Court, while hearing the petitioner’s Special Leave Petition, condoned the delay in filing but found no reason to interfere with the judgment of the Delhi High Court. The SLP was dismissed.

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