Case Law Details
Neeraj Kumar Vs Proper Officer SGST Ward (Delhi High Court)
In a significant ruling on July 30, 2024, the Delhi High Court addressed a critical issue concerning the procedural compliance of issuing show cause notices (SCNs) under the Central Goods and Services Tax (CGST) Act. The case, Neeraj Kumar vs. Proper Officer SGST Ward, centered on whether the method of uploading an SCN under the ‘Additional Notices’ category was sufficient for proper service under the law. This decision follows a petition challenging an order dated December 30, 2023, issued under Section 73 of the CGST Act and highlights essential aspects of procedural correctness in tax administration.
Case Background
Neeraj Kumar, the petitioner, is a sole proprietor of ABM Pneumatics & Hydraulic Sales and has been registered under GST since July 1, 2017. The petitioner challenged the validity of an SCN issued on September 28, 2023, claiming that the SCN was uploaded under ‘Additional Notices,’ a category that is less visible and less accessible compared to the ‘Notices and Orders’ category on the GST portal. This procedural issue led to claims of inadequate notice and thus a violation of the petitioner’s rights.
Key Issues
1 Uploading under ‘Additional Notices’: The crux of the petitioner’s argument was that the SCN was not adequately served. According to the petitioner, the SCN should have been placed under ‘Notices and Orders,’ which is the primary section for formal notices. The argument was that the ‘Additional Notices’ section was not readily accessible, which could undermine the opportunity for the petitioner to respond appropriately.
2. Procedural Non-compliance: The petitioner also contended that the SCN was barred by limitation and challenged the validity of Notification No. 9/2023-Central Tax, which extended the time limits under Section 73(10) of the CGST Act.
3. Precedent Case Law: The petitioner cited precedents, including the decision in ACE Cardiopathy Solutions (P.) Ltd. v. Union of India, where similar issues were examined. The court had previously ruled that merely uploading a notice under ‘Additional Notices’ did not fulfill the requirements for proper service.
Court’s Decision
The Delhi High Court found merit in the petitioner’s arguments. It ruled that uploading an SCN under ‘Additional Notices’ did not meet the procedural requirements for adequate service as stipulated under Section 169 of the CGST Act. The court acknowledged that previous decisions had set a precedent that required notices to be placed under the ‘Notices and Orders’ category to ensure proper service.
The court also noted that this issue was already addressed by the Madras High Court, which had directed improvements in portal design to avoid such issues. However, as the SCN in question was issued before these changes, it was deemed procedurally flawed.
Conclusion
The Delhi High Court’s decision in Neeraj Kumar vs. Proper Officer SGST Ward underscores the importance of adhering to proper procedural norms in the administration of GST-related notices. By ruling that uploading an SCN under ‘Additional Notices’ is insufficient, the court reinforced the necessity for transparent and accessible communication with taxpayers. This ruling not only impacts the current case but also sets a precedent for how GST authorities must handle and serve notices to ensure compliance with legal standards. The matter has been remanded to the adjudicating authority for fresh consideration, allowing the petitioner a proper opportunity to respond, thereby ensuring justice and procedural fairness.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, impugning an order dated 30.12.2023 (hereafter the impugned order) passed under Section 73 of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act) pursuant to the show cause notice dated 28.09.2023 (hereafter the impugned SCN).
2. The petitioner also impugns the Notification No. 9/2023-Central Tax dated 31.03.2023 (hereafter the impugned notification), whereby the time limit specified under Section 73(10) of the CGST Act for passing an order under Section 73(9) of the CGST Act, inter alia, for the year 2017-18 was extended up to 31.12.2023. The impugned notification was issued in exercise of power conferred under Section 168A of the CGST Act.
3. The petitioner further claims that the impugned SCN is barred by limitation.
4. The petitioner is the sole proprietor of a concern named ABM Pneumatics & Hydraulic Sales and is registered with the GST Authorities since 01.07.2017. The petitioner was assigned the Goods and Services Tax Identification Number – 07ARTPK8063B1ZK.
5. The learned counsel for the petitioner submitted that the impugned SCN was uploaded on the portal in the category of ‘Additional Notices and Orders’ which were not easily accessible. It is contended that the show cause notices were required to be placed under the heading of ‘Notices and Orders’ but the same was not done.
6. The learned counsel for the parties submit that the issue involved in the present petition is covered by earlier decisions of this Court, including in ACE Cardiopathy Solutions (P.) Ltd. v. Union of India: Neutral Citation No.2024: DHC:4108-DB.
7. In the said decision, this Court had rejected the contention that uploading of a notice under the heading ‘Additional Notices’ would be sufficient service in terms of Section 169 of the CGST Act. The relevant extract of the said decision is set out below: –
“4. Learned counsel for respondent submits that in terms of Section 169 of the Central Goods and Services Tax Act, 2017, uploading of a notice on the portal is sufficient compliance with regard to intimation to the taxpayer.
5. We are unable to accept the contention of the learned counsel, 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”.
8. The GST Authorities have since addressed the issue and have redesigned the portal to ensure that ‘View Notices’ tab and ‘View Additional Notices’ tab was placed under one heading. However, it is not disputed that the impugned SCN was issued before the GST portal was re-designed.
9. In view of the above, the present petition is allowed and the impugned order is set aside.
10. The matter is remanded to the adjudicating authority for consideration afresh. The petitioner is at liberty to file a response to the impugned SCN within a period of two weeks from date.
11. The concerned authority shall adjudicate the impugned SCN after considering the petitioner’s response and after affording the petitioner an opportunity to be heard.
12. The present petition is disposed of in the aforesaid terms. All pending applications also stand disposed of.
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