Advocate Abhinav Hansaraman[1]
The Madras High Court recently considered whether service of notice through the online portal sufficient in terms of S. 169(1) of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act).
On 06.01.2025, the Hon’ble High Court of Madras (Madurai Bench) passed its order in Udumalpet Sarvodaya Sangham v. The Authority, Under Shops and Establishment Act, WP (MD) No. 26481 of 2024. The Court held that S. 169 TNGST Act “mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials” (emphasis supplied) [Para 22]. Consequently, the Court set aside the orders of assessment issued pursuant to the SCNs which were served only through the online portal.
While the Court had extensively considered Rule 149 of the GST Rules, Rule 52 of the TN General Sales Tax Rules 1959 (pari materia with S. 169(1) of the TNGST Act) and orders of other High Courts on this issue, it is humbly submitted that the Court’s ruling in Udumalpet is not the only possible view, for the following reasons:
S. 169 of the TNGST Act (Service of notice in certain circumstances) provides that:
“Any decision, order, summons, notice or other communication under this Act shall be served by any one of the following methods, namely
(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or
(b) by registered post or speed post or courier with acknowledgment due, to the person for whom it is intended or his authorized representative, if any, at his last known place of business or residence; or
(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or
(d) by making it available on the common portal; or
(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.”
[emphasis supplied]
Three things stand out in the bare text:
(i) Service may be effected “by any one of the following methods”;
(ii) The use of ‘or’ after each sub-clause – indicating that each of these modes are in the alternative to the other; and
(iii) If none of the 5 prescribed modes are practicable, then parties may be served by affixing the notice etc in some conspicuous place;
Clearly, (i) and (ii) indicate that the modes prescribed in each of sub-clauses (a) through (e) are in the alternate and (iii) demonstrates that the residual mode of service is identified and may be resorted to ‘if’ none of the other modes are practicable.
The Hon’ble High Court of Madras has considered a similar question of service in the context of the Tamil Nadu General Sales Tax Act, 1959 and the Tamil Nadu General Sales Tax Rules, 1959. Rule 52(1) (Service of Notice) of the erstwhile rules was similarly phrased and provided:
“The service on a dealer of any notice, summons or order under the Act or these rules may be effected in any of the following ways, namely:-
Rule 52(1)(a): by giving or tendering it to such dealer or his manager or agent or the legal practitioner appointed to represent him or to his authorized representative, or
Explanation._ Endorsement by person who derlivers the notice, etc., of having tendered or given it will be proof for the purpose of this sub-rule.
Rule 52(1)(b). if such dealer or his manager or agent or the legal practitioner appointed to represent him, or his authorized representative is not found, by giving or tendering it to any adult member of his family;
Rule 52(1)(c). if the address of such dealer is known to the assessing authority, by sending it to him by registered post; or
Rule 52(1)(d). if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence.”
[emphasis supplied.]
Notably, the 1959 Rules also contained (i), (ii), and (iii) [as set out above].
The Hon’ble HC, in A Sanjeevi Naidu[2] held that Rule 52 provided various modes of service and “it cannot be said that all the above three modes have to be exhausted before the service by affixture can be effected under clause (d)”.
The High Court of Madras, in New Grace Automech[3] held that the methods of service adumbrated in Section 169 are not conjunctive but are alternate modes of service. “The reason is, the language in which sub-section (1) is couched makes it clear that service shall be by one of the methods adumbrated therein.” The High Court of Madras had also contrasted that while the Income Tax Act, 1961 required an intimation / alert to the SMS or e-mail along with uploading on the portal, the TNGST Act had no such requirement[4]. The Court also noted that assessees under the GST are under a statutory obligation to file a return on monthly basis and was thus expected to visit the portal once a month and thus the necessity for an alert was obviated[5].
Critically, a division bench of the High Court of Madras[6], in the context of the Tamil Nadu General Sales Tax Act, held that the modes of service prescribed in Rule 52(1) were alternative and not cumulative, especially as the rule provided that service may be effected “by any of the following ways”. Notably, said rule is pari materia with S. 169(1) of the TNGST Act and as such ought to have been considered. The TNGST Act further clarifies this position by stating that service may effected by “any one of the following methods”.
A division bench of the High Court of Madras had also held that the appellate authority is the appropriate authority to examine questions of valid service of notice or order[7].
Several High Courts, including the High Court of Kerala have held that service of orders by publication on the portal is sufficient service (for the purpose of S. 161(1)(c) and (d) of the SGST.) For example, in KU Niyas[8], the court held that “service of any communication to the e-mail address provided by an assessee at the time of registration, as also by making available the communication in the common portal of the department, is to be treated as an effective communication under the statute” (emphasis supplied) and in Pee Bee Enterprises[9] held that publication on the web portal was sufficient service.
Assessees under the TNGST act are commercial parties who may be expected to be proficient with use of the internet and the portal – especially as they are under an obligation to file monthly returns. Additionally, with India’s push to move to e-filing, including permitting advance service through e-mail across the Supreme Court and major High Courts, orders of the Supreme Court directing that ITATs not insist on filing appeals in physical mode[10], the view expressed by the Hon’ble High Court of Madras is not the only possible view.
The views expressed by the author are personal.
Reference
[1] Advocate. The author may be reached at ahansaraman@gmail.com or +91 8903784007. The Author is based in Delhi and practices before courts and tribunals in Delhi and Madras.
[2] A Sanjeevi Naidu v. The Deputy Commercial tax Officer, Kanchipuram, 1972 SCC OnLine Mad 347.
[3] New Grace Automech Products Pvt Ltd v. State Tax Officer, (2024) 130 GSTR 510 at Para 7.
[4] Pandidorai Sethupathi Raja v. Superintendent of Central Tax, (2023) 120 GSTR 726 at Para 38.
[5] Id at Para 39.
[6] Singaravelar Spinning Mills v. State of Tamil Nadu, 2010 SCC OnLine Mad 6454 at Paras 7 – 11.
[7] VNV Builders Pvt Ltd v. State Tax Officer, 2024 SCC OnLine Mad 4927 at Paras 5 and 6.
[8] KU Niyas v. The Assistant Commissioner, WP (C) No. 13647 of 2020 (E) at Para 3.
[9] Pee Bee Enterprises v. Assistant Commissioner, 2020 SCC OnLine Ker 3331 at Para 4.
[10] CCE and ST v. Bilfinder Neo Structo Construction Limited, (2024) 7 SCC 53 at Para 7.
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