Sakthi Steel Trading Vs Assistant Commissioner (ST) (Madras High Court)
The Madras High Court in Sakthi Steel Trading vs Assistant Commissioner (ST) examined the issue of valid service of GST notices and orders through electronic means under Section 169 of the CGST and TNGST Acts, 2017. The petitioner challenged an assessment order dated 29 January 2022 that demanded reversal of Input Tax Credit (ITC) of ₹50,569.65 each under CGST and SGST, along with penalties under Sections 122(1)(ii) and 122(1)(vii). The core issue before the court was whether communication of the notice through the GST portal amounted to valid service when the petitioner claimed to be unaware of it.
Background
The petitioner contended that although the assessment notice was uploaded on the common GST portal, it was not effectively communicated, as the petitioner was unaware of its existence and thus could not reply before the order was passed. The respondent tax authority argued that service via the GST portal constituted valid communication as per Section 169(1)(d) of the Act, and the entire system was designed to facilitate paperless, technology-driven compliance.
The petitioner relied on the precedent set by the Madurai Bench of the Madras High Court in Thvya Traders (Dhivya Traders) vs Appellate Assistant Commissioner (Commercial Tax) [(2010) 33 VST 803 (Mad)], which interpreted service rules under the old Tamil Nadu General Sales Tax Rules, 1959 (Rule 52). That case had held that service of notice on a dealer’s relative (brother’s wife) did not amount to valid service, emphasizing strict compliance with procedural safeguards.
