Axiom Gen Nxt India Private Limited Vs Commercial State Tax Officer (Madras High Court)
Madras High Court recently delivered a judgment in the case of Axiom Gen Nxt India Private Limited Vs Commercial State Tax Officer, addressing the validity and effectiveness of serving Goods and Services Tax (GST) notices and orders through the common portal. The court acknowledged that the common portal is a designated computer resource under the GST Act, and the uploading of communications onto this portal constitutes a sufficient mode of service as per Section 169(1)(d) of the GST Act, read with the Information Technology Act, 2000. The court clarified that receipt is deemed to occur when the electronic record enters the common portal, regardless of whether the assessee has explicitly designated it as their computer resource.
However, Justice observed a critical distinction between “sufficient” and “effective” service. While the court upheld that uploading to the common portal fulfills the legal requirement of service, it noted that in many cases, this mode alone proved ineffective. Several petitioners cited reasons for not responding to notices, including placement in obscure sections of the portal, lack of computer literacy, being senior citizens, employee turnover handling GST matters, or reliance on consultants who failed to check the portal. The court highlighted instances where tax authorities, despite receiving no response to initial notices uploaded on the portal, continued to issue subsequent reminders solely through the same method, without exploring alternative modes of service stipulated under Section 169 of the GST Act.
The court expressed its expectation that tax authorities should strive for service that is both sufficient and effective. It suggested that when the initial mode of service proves unsuccessful, authorities should consider alternative methods like sending reminders via Registered Post with Acknowledgment Due (RPAD). The court reasoned that if at least one notice is received through a more direct method, the assessee cannot claim ignorance of the proceedings. Failing to adopt such measures, the court opined, leads to unnecessary litigation, wasting the time of both the assessees and the court, and potentially requiring tax officers to redo their work. The court deemed the repeated issuance of notices through an ineffective mode as a mere formality that serves no useful purpose.
Consequently, the Madras High Court set aside several ex parte assessment orders. In cases where the petitioners had not responded to notices solely uploaded on the common portal, the court remanded the matters for fresh consideration, subject to the petitioners paying a portion of the disputed tax amount (10% or 25% depending on the specific circumstances). However, in instances where personal hearings were not provided despite the filing of a reply, or where orders were passed after GST registration cancellation without considering alternative communication methods like email, the court set aside the orders unconditionally. The court also addressed cases where appeals were filed late, setting aside the ex parte orders on the condition of partial tax payment. The court explicitly directed the tax authorities to de-freeze any attached bank accounts once the respective orders were set aside and to provide proper opportunities for hearing after the remanded cases are reopened.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
