Case Law Details
Udayraj Yadav Proprietor Zenith Creative Services Vs Sales Tax Officer (Delhi High Court)
In a recent verdict, the Delhi High Court addressed the case of Udayraj Yadav, proprietor of Zenith Creative Services, against a demand of Rs 22 lakhs imposed by the Sales Tax Officer. The dispute arose due to the improper uploading of a Show Cause Notice (SCN) on the GST portal.
The petitioner, Udayraj Yadav, contested the demand citing unawareness of the proceedings initiated against them. The crucial Show Cause Notice was uploaded under the category of “Additional Notices” on the portal, which went unnoticed by the petitioner. This procedural anomaly has been highlighted in judgments from the Madras High Court, emphasizing the need for clarity in the portal’s architecture to ensure proper communication of legal notices.
The Delhi High Court, considering the petitioner’s argument and precedent from the Madras High Court, ruled in favor of Udayraj Yadav. The court set aside the demand, attributing the oversight to the complex design of the portal. It directed authorities to enable the petitioner to respond to the Show Cause Notice within a stipulated timeframe and subsequently re-adjudicate the matter.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner impugns order dated 14.03.2024 whereby the impugned Show Cause Notice dated 13.12.2023, proposing a demand of Rs.22,83,154.00 against the petitioner has been disposed of and a demand including penalty had been created against the Petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act).
2. Issue notice. Notice is accepted by learned counsel for respondents. With the consent of parties, the petition is taken up for final disposal.
3. Learned counsel for the Petitioner submits that Petitioner was unaware of the initiation of any such proceedings and accordingly could not respond to the same. He submits that the said Show Cause Notice was uploaded on the portal in the category of „Additional Notices‟ and was not communicated to the petitioner through any other mode of communication. He further submits that since it was merely uploaded on the web portal under the tab of “Additional Notices and Orders”, and accordingly, petitioner was unaware of any such proceedings initiated against it.
4. Reference may be had to the judgment of the High Court of Madras in W.P. No.26457/2023, titled M/s East Coast Constructions and Industries Ltd. vs. Assistant Commissioner (ST) dated 11.09.2023, wherein the High Court of Madras has noticed that communications are placed under the heading of “View Notices and Orders” and “View Additional Notices and Orders”. The Madras High Court had directed the respondents to address the issue arising out of posting of information under two separate headings. As per the petitioner, the Menu “View Additional Notices and Orders” were under the heading of “User Services” and not under the heading “View Notices and Orders”.
5. This issue is further highlighted by another judgment of the Madras High Court dated 31.07.2023 in W.P. No.22369/2023 and other connected petitions, wherein the Madras High Court has noticed as under:-
“3. The only ground on which the, the impugned orders are under challenge is that the notices, which preceded the impugned orders were hosted in the Dashboard of the petitioner meant for „Additional Notices and Orders‟ whereas, the notices should have been hosted by the respondent in the Dash Board for „View Notices and Orders‟.
4. The learned counsel for the petitioner has drawn attention to the manual copy given by the respondent in the web portal, which reads as under:-
“How can I view or download the notices and demand orders issued by the GST tax authorities?
To view or download the notices and demand orders issues by the GST tax authorities, perform the following steps:
1. Access the gst.gov.in URL. The GST Home page is displayed.
2. Login to the GST Portal with valid credentials.
3. Click the Services > User Services > View Notices and Orders command.
5. It is submitted that had the notice been uploaded in the correct place, the petitioner would have seen it and replied to the same and participated in the proceedings. Since the Notices and the Orders were hosted in the Dashboard of the petitioner meant for “Additional Notices and Orders”, the petitioner failed to notice and file a reply to the Show Cause Notice.
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9. The problem has arisen on account of the complex architecture of the web portal. It has been designed to facilitate easy access of informations. It has however resulted in the petitioner failing to notice the notice that was issued to the petitioner prior to the impugned order on 20.03.2023. It went unnoticed by the petitioner, as a result of which, the impugned orders have been passed on 29.04.2023.”
6. Attention is also drawn to yet another judgment of Madras High Court dated 08.02.2024 in Writ Petition No.2746/2024, titled Murugesan Jayalakshmi Vs. State Tax Officer, wherein the Madras High Court has noticed that the said issue has been addressed and the portal has been redesigned and both the “View Notices” tab and “View Additional Notices” tab are under one heading.
7. Clearly, petitioner has made out a case that Petitioner has missed out the receipt of the notice as it was merely uploaded on the portal under the category of “Additional Notices” tab and accordingly could not respond to the Show Cause Notice.
8. In view of the above, impugned order 14.03.2024 is set aside. Since the only reason for passing the impugned order is that Petitioner had not filed any reply/explanation, Petitioner needs to be granted one opportunity to respond to the Show Cause Notice and thereafter, the Show Cause Notice to be re-adjudicated.
9. Respondent are accordingly directed to open the portal to enable the Petitioner to file a response to the said Show Cause Notice dated 13.12.2023, which shall be filed within a period of four weeks. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75 (3) of the Act.
10. It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party. All rights and contentions of parties are reserved.
11. Petition is disposed of in the above terms.
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