Sparkin Sunlit Private Limited Vs Commissioner Delhi Goods And Service Tax And Anr (Delhi High Court)
Delhi High Court has set aside a demand order against Sparkin Sunlit Private Limited, ruling that the company was not properly served a show cause notice (SCN) by the tax authorities. The court observed that the SCN was uploaded on an obscure tab of the Goods and Services Tax (GST) portal, preventing the petitioner from accessing it and responding.
Sparkin Sunlit Private Limited had challenged the SCN dated December 9, 2023, and the subsequent demand order issued on March 29, 2024, by the Delhi Goods and Service Tax Department. The petitioner contended that the SCN remained unknown to them as it was placed under the ‘additional notices tab’ on the department’s online portal, a location not routinely monitored by taxpayers.
During the hearing, the counsel for the tax department acknowledged that prior to January 2024, notices were indeed being uploaded in this manner. This admission aligns with concerns raised in previous cases regarding the visibility of such crucial communications on the GST portal.
The High Court referenced its earlier decision in the case of Satish Chand Mittal (Trade Name National Rubber Products) v. Sales Tax Officer SGST, Ward 25- Zone 1. In Satish Chand Mittal, a coordinate bench had similarly found that notices placed under the ‘Additional Notices & Orders’ tab on the GST portal were not easily accessible to taxpayers, leading to a denial of opportunity to respond. That judgment had set aside the impugned order and granted the petitioner a chance to reply to the SCN. The court in Satish Chand Mittal had also noted the department’s submission that the issue with the ‘Additional Notices & Orders’ tab placement was being addressed.
Further judicial precedents cited in relation to this issue include M/s ACE Cardiopathy Solutions Private Ltd. v. Union of India & Ors. and Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52, both of which dealt with similar procedural lapses in notice delivery via the online portal. The court also referred to Neelgiri Machinery through its Proprietor v. Commissioner Delhi Goods and Services Tax & Ors. and Anant Wire Industries vs. Sales Tax Officers Class II/Avato, Ward 83 & Anr., where similar remissions were granted to ensure taxpayers received a fair hearing opportunity.
Following these precedents, the Delhi High Court concluded that Sparkin Sunlit Private Limited was denied a proper opportunity to file a reply to the SCN. Consequently, the court set aside the demand order.
The court directed Sparkin Sunlit to file its reply to the SCN within 30 days. The Adjudicating Authority is then required to consider the reply and pass a fresh order after providing the petitioner with a hearing. The court also mandated that future hearing notices for this case be not only uploaded correctly on the portal but also emailed to the petitioner to ensure proper delivery.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
